Article|Industry Perspectives

Gig Workers Demand Real-Time Payments

Published Sep 18, 2021

Over the last decade the gig economy has risen to global prominence, increasing worldwide at an average of 17% every year.

This rise has been fuelled by the gig economy’s flexibility and reach, lowering costs for employers as they hire on an hourly or per-project basis while allowing workers to earn simultaneously from multiple sources. Digital transformation has played a key part, enabling workers to use a variety of digital platforms to find work, deliver results, and receive payment.

Increase And Opportunity

In the USA the value of gig economy is currently predicted to rise to over $450 billion by 2023, more than twice the value it held five years previouslyDuring the pandemic it constituted 36% of all workers in the USA.

This reflects a global trend; while most initial activity was in the US and Europe, emerging economies are catching up. China is now the second-largest gig economy market, with Brazil third and India fifth, including a 150% rise in the number of Indian freelancers over the past year. In Africa, it’s estimated that 80 million young people will be involved by the end of the decade. These highly populated nations have huge potential for growth, as they develop access to the digital infrastructure for gig economy workers.

Technology Is Enabling Gig Economy Growth

  • Expanding global internet coverage. Smartphones are now ubiquitous in all markets, lowering the entry barrier. Freelancers across the world can now use the internet to bring in work, by connecting directly to customers and clients via specialised platforms like Uber.
  • Collaboration platforms are making physical spaces redundant. Companies can now utilise a dispersed workforce that collaborates digitally via programs like Zoom, Slack, Microsoft Teams etc. No longer tied to physical spaces, these companies now have access to a much bigger proportion of the global workforce, creating a truly open market for talent.
  • Technology offers gig workers’ bargaining power over employers. Gig workers, using internet to find work, can now choose between a much wider selection of employers. So employers must do more to attract the best talent. Good payment technology offers one keyway to stand out from competitors – by offering necessities like real-time payment and reduced payment volatility, employers can make life more comfortable for gig workers and earn their loyalty.
  • Emergence of newer payment systems and infrastructure – Money movement is now much faster and more flexible than traditional SWIFT transfers, and can allow unbanked workers to enter the gig economy by using virtual debit cards to receive quick payments.

Pandemic Has Changed The Way People Work

The disruptive effect of the Covid-19 pandemic has hugely accelerated gig economy growth, with lockdowns and furlough schemes driving a big shift towards remote working and freelancing; 12% of the US workforce took on a freelance job during the pandemic, either to supplement a hiatus in their previous work, or as a new norm.

These included a massive rise in app-driven food deliveries as restaurants were closed and populations went into isolation, and there was also a big increase in the number of people using services like online teaching and tutoring to replace closed schools, using quick new streams of income to replace lost work. These changes persisted even as economies began reopening, indicating a permanent change rather than a blip.

Simple Seamless And Scalable Payments Are Vital For Gig Economy Success

The gig economy will continue to expand in the next half-decade as millennials and generation Z become a larger proportion of the workforce. Being digital natives, they’ll expect financial services that are more responsive to their specific needs and pains.

Vital requirements will include:

  • Quick transfers – over half of gig workers prefer real-time payments, and will gravitate towards systems that don’t cause painful delays.
  • Ease of use – the best solutions will require minimal set-up, lowering the barriers to entry and enabling workers to get started ASAP.
  • Versatility – optimal platforms will route everything through one portal offering a full range of solutions, instead of forcing users to switch between multiple pieces of software.
  • Coverage – as the gig economy becomes more global, comprehensive coverage and integration into a wide variety of national markets will be key.

In five years’ time the companies that have thrived in the gig economy will be those who embraced and embed simple, seamless and scalable payments strategy. Nium provides a single platform that makes it easy, fast and convenient to pay gig economy workers globally.

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