Visa: Gig workers now expect real-time payments

What was once new in payouts becomes table stakes, and what was once simply nice to have becomes an expectation.

Jim Filice, vice president and head of new payments at Visa Canada, told PYMNTS that the gig economy — marked by flexibility, platforms and choice — is a natural fit for real-time payments.

In a workweek that can be anything but predictable, it makes sense that real-time payments are a widely embraced choice for on-demand workers. They appreciate the option of getting paid as the work is done, at the end of each shift and project if they choose.

In Canada, the labor economy is becoming firmly entrenched in a number of sectors: one in 10 adult Canadians identifies as an independent contractor.

This week, Visa launched DoorDash Fast Pay, an integration of Visa Direct with Stripe’s instant payments offering that enables faster payments to drivers across Canada.

Read more: Visa Canada and DoorDash offer real-time payments via Stripe

Mechanically, DoorDash uses Instant Payouts with Stripe Connect in the US and Canada, allowing Dashers to accept payments and direct them to their debit cards or bank accounts. It helps companies create a platform for purchases and payments between buyers and third-party sellers.

DoorDash couriers normally receive weekly paychecks, but under the Fast Pay program, US couriers can cash out their current earnings once a day for a $1.99 fee. Funds are not deposited directly into workers’ bank accounts, but rather into their debit cards.

Filice said that at a high level, DoorDash delivery people can, at the end of the shift or at the end of the day, immediately access the funds owed to them.

The past is a prologue

DoorDash Fast Pay has been available for several years in the United States, and if the prologue has passed, the rewards will accrue in Canada. The US rollout revealed that employees with real-time payment options are among the top performers, using Fast Pay at least once a week.

Instant payments in general, but particularly in Canada, “they become table stakes,” Filice said. “The reality is that these organizations are competing for individuals, and a great way to compete for individuals is to provide more flexibility on the payment side.”

And, as he pointed out, Canadians will choose who they work for — and will choose who they work for. want to to work — depending on access to funds. After all, it’s more rewarding to work for an organization that allows employees to get paid as they go, rather than having to wait a week to get paid for last week’s work.

Visa’s own surveys of construction workers showed nearly nine in 10 workers (89%) said they were likely to sign up for real-time payments, and two-thirds (66%) said they would choose gig companies that offer real-time payouts over others.

“It benefits the business itself, in terms of worker availability,” he said.

Staging

Filice argued that the integration of Stripe’s instant payments functionality with Visa Direct paves the way for wider adoption of real-time business payment disbursements on Visa credentials.

“Disbursements are becoming increasingly critical for businesses and governments around the world,” Filice said. The pandemic, of course, has underscored the need to be able to move money quickly.

He said that in Canada, account-to-account disbursements are helping to replace traditional means of transferring money, including wire transfers, and are making inroads over paper cheques.

Digging a little deeper, he said, FinTechs have been very visible adopters of instant disbursements, ranging from digital brokerages to PayPal’s Cash app. There has been a growth in instant insurance payments and crisis payments that get money to people in need, without them having to wait days for the funds to be settled.

Related: Gig Economy Companies Turn to FinTechs to Enable Instant Payments

Filice said the greenfield opportunity, writ large, is important. He added that in the short term, Visa will activate 3.5 billion digital wallets globally, in addition to the access the network already has with five billion bank accounts globally.

“It opens the door to the ability to instantly transfer money to anyone in the world,” he added.

Nodding to the natural progression of real-time payments, he noted that while gig economy payments and peer-to-peer (P2P) transactions have been driving forces and enablers, business-to-consumer (B2C) payments are likely to see a groundswell.

Remittances, he said, are also a key beneficiary of faster payments, where migrant workers send money home to family and friends to pay for medical bills, schooling and schooling. ‘grocery store.

“With remittances, it is essential that the money flows in real time and efficiently – and does not add significant cost to the sender – and benefits those economies where 20% of their GDP can come from remittances,” Filice said.

Looking ahead, Filice said all sorts of payments will gravitate towards real time.

“We’re all headed in that direction, as long as we can make it efficient and everyone upgrade their systems to handle those payments,” he said. “You’ll see a greater demand for real-time because it benefits consumers and also the business that offers it.”

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