Read the entire Mastercard story on Bloomberg.
As a nursing student, Ashley Ware juggles a demanding schedule. But in between studying and clinical hours, she makes ends meet by taking on odd jobs, such as house cleaning and gardening, through an app that offers same-day help.
“Having flexible work has been incredibly helpful while I’ve been in school,” she says. e
However, her path hasn’t always been easy. Disputes with clients about how many hours she’s logged, along with slow-to-arrive and difficult-to-track payments by cash or check, have made it hard for her to predict her income and plan a budget.
Ware’s experience reflects the ups and downs of work in the gig economy, a rapidly growing employment sector characterized by digital platforms facilitating services between freelancers and customers. A McKinsey survey found that 36% of the U.S. labor force identifies as “independent workers” — which can include anyone from college students driving for a rideshare app to content creators monetizing their following on social media — up from 27% in 2016.
“Propelled by increased digitization, rising costs of living and a cultural shift toward more flexible schedules, gig work is now thoroughly mainstream,” says Sherri Haymond, Co-President of Global Partnerships at Mastercard. A large percentage of Gen Z aren’t even considering going into a normal salaried job, demonstrating how valuable this cohort of the economy is — it offers a lot of value, like greater autonomy and career opportunities.”
Speed of payment is top priority
For many, gig work and content creation offer liberation from the nine-to-five grind, allowing, say, parents of young children to continue their careers or part-time workers to supplement their wages. This kind of work also provides an opportunity for entrepreneurs and creators to turn a side hustle into a small business, with the autonomy to choose their own projects and chart their own futures.
However, the gig economy has brought new challenges, for both gig workers and platforms, in terms of paying and getting paid.
“Many gig workers have unpredictable and irregular income streams,” says futurist Shivvy Jervis. “As a result, speed of payment is their top priority.”
These workers need to know they will be paid for each job and have access to their wages and tips as soon as they are disbursed. The traditional model of work now, get paid later doesn’t work for them. The gig platforms they work with must facilitate fast and easy-to-access payouts.
And as the digital revolution brings together contractors and clients from around the world, the demand for secure cross-border payments is growing. Gig workers now account for roughly one in ten consumers making or receiving cross-border payments. However, because many banks rely on decades-old, paper-based infrastructure to transfer money overseas, these payments can take days — an added hardship for the people who rely on them as a lifeline. Gig workers are more likely (61%, as compared with 52% of all consumers surveyed) to have to use savings to cover everyday expenses, according to research from Mastercard.
A team effort
To help gig workers and content creators overcome these challenges, the financial ecosystem has made major upgrades to its payment channels.
“Because gig economy payments are so different from traditional payroll, they’ve brought their own technical problems,” says Haymond. “Through collaborations and innovation, we have built new infrastructure that digitizes disbursements to meet the demands of today’s digital-first society.”
Stripe, a technology company that builds financial infrastructure, has been part of that effort for over a decade. Gig work platforms and marketplaces use Stripe Connect to manage fund flows. Stripe’s users include a variety of on-demand platforms, spanning grocery, transportation, food delivery, content creation and more.
When a platform or marketplace builds on Stripe, they can offer near instant payouts to their customers. For example, a writer who has a blog on Substack can access their earnings within minutes of their readers’ paying their dues.
“Global money movement is a team sport,” says Neetika Bansal, Business Lead, Stripe. “Enabling creators to access their earnings near instantly requires partnership, from creator platforms, to Stripe, to Mastercard. As a result, creators can quickly reinvest in growing their businesses.”
Stripe has been teaming up with Mastercard to help advance the technology that underpins it. Enabled by Mastercard Move, platforms and marketplaces that build on Stripe can now distribute near instant payouts to U.S. debit cards as well as some U.S. bank accounts.
Mastercard Move, Mastercard’s portfolio of money movement capabilities, provides banks, payment service providers and direct disbursers with a fast, transparent, secure and efficient money transfer solution, serving both domestic and international needs. The portfolio of solutions reaches more than 180 countries and 150+ currencies, with access to more than 95% of the world’s banked population.
Gig platforms are already experiencing positive impacts. ShearShare, a marketplace that allows hairdressers and other beauty professionals to rent workspace on demand at salons in over 1,000 U.S. cities, through their participation in Mastercard’s startup engagement program Start Path, was connected to a Mastercard Move enabled payment service provider.
“Previously, paying our hosts was a very manual and tedious task,” says Courtney Caldwell, co-founder and CEO of ShearShare. “Now the process is fast and efficient, which leads to happier users and improved retention for us.”
For workers like Ware, fast, digital payments bring peace of mind. “Gig work is my support system while I’m at school,” she says. “I want to help people, whether it’s going into nursing or doing something around the house for a client. That’s what makes it rewarding, and knowing when I have money coming in helps me keep going.”
For further information about Mastercard’s money movement solutions, visit the website.
