Gig workers are used to autonomy and flexibility in when, how and where they work. It's no surprise they crave that same leeway in how and how fast they get paid.
Expectations & Experiences: Channels and New Entrants, the most recent consumer trends survey from Fiserv, found 70 percent of all those with a gig job or side hustle prefer electronic payments for their work, including directly to a bank account, debit or credit cards, or through a mobile payment provider. Among millennials with a gig job, 80 percent prefer to be paid electronically.
Even so, 31 percent of gig workers have been paid with a paper check. Just 13 percent wanted it that way.
"As the gig economy grows, so will the importance of providing flexible payment solutions," said Shirra Frost, director of product marketing for electronic payments, Fiserv. "Companies need to pay people the way they want to be paid."
Growing Expectations of the Gig Economy
The gig economy is based on people working freelance, temporary or short-term positions outside traditional employment. And it's booming. One in five adults with a banking account has a gig job or side hustle, according to the Fiserv survey.
Workers in this economy work differently, and when it comes to being paid, many have different expectations and needs. Traditional payment approaches and standard mechanisms – checks and direct deposits – won't always work for those without a traditional banking relationship.
Fiserv found 72 percent of consumers who prefer digital payments said it's because they want their money faster. Getting paid quickly is often the expectation and need for gig workers, who don't enjoy the benefits of a consistent paycheck.
"The 9-to-5 payroll model doesn't match gig workers' expectations or reality," said Shannon Myhre, product manager for digital disbursements, Fiserv. "People with flexibility in their schedules often want the same flexibility in how and when they access their funds."
In response, many companies are offering near-instant access to earned wages. Using innovative payment platforms and services, workers no longer have to wait until the next payroll cycle before getting paid.
New Opportunities for Digital Disbursements
The growth of the gig economy and fintech go hand in hand.
"Fintechs and other providers are enabling new work models and payment options, which is fueling growth in the gig economy in terms of participation, productivity and attraction of new entrants," Myhre said.
In turn, gig workers are influencing how they get paid. Whether someone drives for Uber, Lyft or Grubhub, for example, they're essentially doing the same work: driving. Beyond the actual work, user experiences and payout options have the power to influence the companies gig workers initially choose to work with and how long they stay. Workers will go with the provider that offers the flexibility and ease they want, Myhre said.
To respond to those changing needs and expectations, it will be important for provider systems to accommodate payments innovations with the scale and flexibility that fit how people choose to live and work.
"As the way we work evolves, so will the opportunities in this new economy," Frost said. "Expect to see innovative products and services created to serve gig workers' unique needs – and for those innovations to make their way into mainstream consumer banking and payments."