Gig Workers access real-time disbursements

The gig economy is a changing landscape where worker retention is becoming an issue. It is also an ideal use case for instant and real-time payments.

Real-time payments cure a host of ills in a major gig industry that today includes carpool and food delivery drivers, restaurant servers, cleaning crews and a swarm of self-employed workers who get paid by the task, by the route or by the delivery and want their wages now.

With surveys revealing that only 15% of America’s estimated 59 million workers have cash on hand for an emergency, and given that 29% have taken out expensive payday loans in the past year, that’s a disruptive space with real-time payments and early access salary solutions.

On managed disbursement platform Onbe, Chief Financial Officer (CFO) Brian Levin told PYMNTS: “When you [think of] the 15% of people who pay for access to cash or take out payday loans or other ways to access funds faster, these are expensive solutions. »

It goes both ways, with gig workers paying to get their income faster and gig platforms paying to deliver salaries through legacy means. So payment becomes not just a hassle, but a two-headed cost monster, frustrating site workers and squeezing margins for employers.

“The pain points that we’re allowing to remove are connectivity to these time systems, these record keeping systems, and giving them the reports to enable them to reconcile and track what people owe and what people have been paid,” said Lévin.

“Where we can get faster payments to the recipient through some of our technologies is through real-time payments,” he added. “It’s like dispersing funds over a non-payment cycle, providing access and integrating with time tracking or registered timekeepers, giving them the tools to disperse funds” faster, at lower cost and with the digital flexibility of the gig economy. on.

See also: The Expanding Payments Choice Handbook

Scaling fast payments, reducing costs

Knowing that payday loans and similar form factors like checks are expensive and time-consuming to distribute and reconcile is a disruption that is headed in the wrong direction.

But it doesn’t have to.

“We can offer them a technologically forward-looking solution that gives them faster access to their funds, through early access to salaries or faster access to real-time payments,” Levin said.

In addition to speed and access, this approach provides choice, and that’s essential.

“Choice is the ultimate ubiquitous way to get paid, right?” he said. “If you want to take control of your money, you want to have choice over how you access that money.”

If you don’t offer this payment choice to construction workers who often have active relationships with more than one platform, that driver or freelancer will simply move on to the next construction site. With 11 million jobs now open in the United States and the so-called “Great Resignation” underway, retaining the loyalty of reliable workers is all about the money.

“There is no vacation time,” he said. “There is no sick time. They are contractors. Money really is the driving force, and [over] 80% of decision making for some of these construction workers is based on money.

Hence the need for real-time labor payment solutions that give on-demand workers options to access not only earned wages, but also early access to wages they don’t have. not yet generated.

Those who offer choices reap the benefits.

“One of the things that real-time payments and payment tools and choice specifically helps is not just giving [workers] an off-cycle salary, giving them access to that salary more quickly, but also becoming more loyal to that supplier,” Levin said. “Now they not only have access to their salary faster, to different modalities with choice, but also to a cheaper solution, a safer solution and a faster reception of this money. This makes it possible to retain the sponsoring company.

Read also: How Grubhub Leverages Instant Payments to Improve Driver Satisfaction

Disturbance with a Difference

Delivering payment is a challenge, but it comes with other parts of the real-time package, like messaging and the crucial details that come with irrevocable real-time payments.

And it goes beyond that with a host of issues related to securely sending and receiving real-time payments with a non-traditional workforce that requires quick and smart solutions.

With Onbe’s capabilities in virtual accounts, physical and virtual cards, same-day automated clearing house (ACH), push to bank account, push to debit, as well as premium currency conversions for cross-border payments, “all of these choices give real-time access to funds, off-cycle if needed, but also give the partner business the ability to get closer through reporting and lower their costs to support payments,” Levin said.

Eliminating much of the back-office work and increasing visibility with reporting tools and reconciliation tools helps companies pay on-demand workers faster, securely, and accurately. It’s the real-time win-win for the platforms and the workers they rely on.

And it’s this optimal scenario of disruption that’s truly a good thing, radically modernizing yesterday’s payment terms to align with the realities of the gig workforce.

“With any integration, there’s an opportunity,” Levin said. “That’s where we use what we’ve built in a scalable way, we’ve built it to enable the [application programming interface (API)] connectivity and system connectivity for efficient migration, or to enable efficiencies through conversion. »

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NEW PYMNTS DATA: THE CUSTOM PURCHASING EXPERIENCE STUDY – MAY 2022

About: PYMNTS’ survey of 2,094 consumers for The Tailored Shopping Experience report, a collaboration with Elastic Path, shows where merchants are succeeding and where they need to up their game to deliver a personalized shopping experience.

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