Lots of jobs – fast pay! It’s time to redefine the Gig way!
India spearheads the global Gig Economy with a 24% share of the online labour market, according to Oxford Internet Institute’s ‘Online Labor Index’ – also, as per a Truelancer Freelancer Survey, around 1.5 Cr people in India are working independently in different Gig Economy sectors, reports Inc42. Around 72% of all gig projects were in large corporate and professional services in 2018-2019, reports Economic Times.
The statistics presented above project a promising picture of the future of the Gig Economy in India. The Gig Economy has been fuelled by an elevation in the requirement of on-demand workers, jobs having a short-term nature, and an incursion of independent and migrant workers. This gives rise to the replacement of full-time employees by independent contractors and freelance workers.
The boosting rise in peer-to-peer apps in a swerve of markets, viz. travel, accommodation, food delivery, etc. has contributed to legitimising the gig working economy. The workers in this economy of gig work are experiencing a paradigm shift in the nature of work and employment. As an outcome of this, new avenues and challenges for payment networks have arisen to accommodate the requirements of this workforce of the future.
Presenting faster payments avenues and assisting freelancers and temporary workers in circumventing the incurrence of work expenses would motivate higher volume of people to participate in the Gig Economy. The ability to make instant payments in real-time and avoid the time-consuming and expensive reimbursement process would be a huge boon for the industry. In the Gig Economy, gig work can be promoted if faster payments are introduced on a wider scale with new payment methods.
In a Gig Economy type of work relationship, personnel, or workers are categorised as “independent contractors” as against employees. As a result, the obligation of complying with the mandate of the wage orders of the industrial and workers’ welfare legislation – providing for various welfare benefits to employees, viz. minimum wage, appropriate working conditions and customary working hours – remain non-applicable to the organisation.
With the traditional banking gone passé (credit goes to the peculiar nature of the Gig Economy and the subsequent rise of the FinTech industry to rival traditional banking services), getting paid as a gig-worker is still a divisive issue. While on one hand there is the milieu of the unrest expressed in India, United States, and the United Kingdom by Uber drivers with strikes concerning better pay and transparency in 2018 and 2019 – as reported by The Washington Post –, on the other hand, gig-worker platforms such as HackerOne are redefining worker-client relationship by letting the gig-workers keep their entire gig pay (reward). The platform has the ‘bounty’ clearly listed by the client for the jobs – timeline for which isn’t set as it is a “piece-work.”
However, for the majority unorganised (informal) workers of the Gig Economy working as independent contractors, new payment avenues are required to ensure fairness and transparency with expediency in being able to receive timely payments. The global FinTech community has taken note of this pain point resultant to which new payment methods are making their way into the market to promote the Gig Economy growth levels. These include the introduction also of “on-demand” payment management solutions, prepaid cards (that limit spending by a cardholder), and payroll tackling platforms such as GigWage (Helping Businesses Pay Contractors – Powering the Future of Work). In April 2019, VISA introduced Card Payouts App for businesses (a new way to pay gig workers in real-time built for NetSuite as a card-based front-end user experience for treasury banks that integrates with their existing infrastructure and complements Banking as a Service program of NetSuite) in collaboration with Oracle NetSuite.
The primary objective is to eliminate the delays experienced by the “on-demand economy” workers in regard to the receipt of their payment. In this pilot program, various participating treasury banks were to permit their clients to permit fast payouts via Visa Direct (push-to-card payments’ solution), the real-time push payments solution of Visa that helps millions of Gig Economy workers to get paid quickly and conveniently. Where Gig Economy workers were facing delays to get paid, and while transfers usually taking days in multiple to initiate – Visa Direct and the new Card Payouts app support a key resolution to mobilise treasury bank activities for card payouts.
The innovative payment operating system, Rapyd, unlocks cash and local payment markets for modern digital businesses. Making the world smaller by connecting and harmonising payment systems from all over the globe via a single SDK, Rapyd empowers eCommerce merchants, gig economy platforms, online challenger banks, e-wallets, remittance providers, online lenders, and also conventional financial institutions to thwart the confines of outdated infrastructures. In the absence of flexible, local payment alternatives and banking options tailored to a global Gig Economy workforce, engagement and retention get sacrificed.
Another notable gig-worker payment solution is Pune (India) based BON Credit (the short-term credit – ranging from Rs. 500 to Rs. 10,000 – solution for gig-workers). While Uber drivers kept on struggling with being unable to pay for their fuel needs owing to a dearth of physical money (cash-crunch), BON Credit has offered an innovative solution to get the cab drivers and gig-workers off cash with their BON Card – the credit card for Gig Economy workers issued by Mastercard. In collaboration with YES Bank, Federal Bank and over 3000 non-banking financial companies (NBFCs – capable of offering credit to professionals), BON platform permits real-time auction among NBFCs to sanction credit.
Together such promising payment solutions result in keeping on-demand gig-workers engaged as their locally preferred payment types and needs are now getting fulfilled. Instilling simplification in local payments is central to scaling in the global Gig Economy – especially when the Gross Volume of the global Gig Economy is anticipated to grow by a 17.4% CAGR through 2023, reports a MasterCard Gig Economy Industry Outlook and Needs Assessment White Paper titled, “The Global Gig Economy: Capitalising on a $500 billion Opportunity.”