Payments

Mastercard powers pay advance for hourly and gig workers

  • Gig workers increasingly have to deal with erratic pay and fixed pay cycles.
  • Mastercard's Send is being used by employees to access their accrued earnings
Mastercard powers pay advance for hourly and gig workers

Mastercard wants to provide the payment infrastructure for the growing trend of pay advance. Mastercard Send is designed to work with banks and businesses with near real time payments to almost all debit cards.

Different work requires different types of paydays: Gig workers typically piece together erratic sources of income to support themselves and their families.

  • 38.7 percent of US workers participate in the gig economy.
  • And because much of the population lives paycheck to paycheck, they’ve turned to pay advances.
  • More than one-third of US gig workers received approximately $236 billion in pay advances in 2018, according to research published by Mastercard.

Everyday is payday: With Evolve Bank and Trust, Mastercard is using Send to support companies which work with large organizations to provide interest-free, pay advances to their hourly workers and gig workers

  • One early client is Branch which provides financial wellness technology to hourly workers. Large employers use Branch Pay to provide their employees with early wage access.
  • Mastercard Send can push funds in near real time to nearly all U.S. debit cards.
  • Earlier in 2019, Mastercard partnered with Lyft to give drivers immediate access to their earnings. The co-branded debit card is powered by Payfare, which offers a full service mobile bank account with instant access to employee earnings.

“As hourly workers’ schedules tend to fluctuate, so do their earnings and their ability to meet day-to-day financial needs,” said Atif Siddiqi, Branch’s CEO. “Branch helps increase financial stability among hourly workers by providing them instant access to earned wages, budgeting tools, and the opportunity to pick up more shifts.”

Tapping wages as they’re earned: Fintech is addressing the challenges of being a gig worker with new types of payments.

  • Companies like Earnin, PayActiv, Payfare have various solutions to help employees tap their accrued earnings.
  • Some banking products and banking as a service providers have competitive offerings in this space. Companies like Green Dot and N26 offer pay advance functionality for their clients and customers.
  • Pay advance typically requires account holders to have direct deposit for their earnings.
Payments, Podcasts

Extend’s Andrew Jamison: ‘There’s a broad disconnect between what happened in ERP with what’s going on in financial technology’

  • Managing B2B products at Amex, Andrew Jamison saw card issuance didn't serve the way the economy was headed.
  • He founded Extend, which works with banks' existing technology to issue virtual cards.
Michael Deleon | January 17, 2020
Member Exclusive, Payments

Research: The rise of alternative payment methods around the world

  • Alternative payment methods are growing globally, replacing cash and cards.
  • Tearsheet looks at the numbers by region.
Zoe Murphy | January 07, 2020
Payments, Podcasts

Visa’s Bill Sheley: ‘Everyday, millions of consumers and business get asked how they want to get paid’

  • Visa Direct enables every Visa card to receive money in real time.
  • Visa Direct's Bill Sheley joins us to talk about the progress his firm has made powering this ecosystem.
Zack Miller | December 30, 2019
Payments

Payments in 2020: Experts share their perspectives on rewards programs, automation, and voice (Part 3)

  • Tearsheet asked leading experts what they expect from the payments industry in the future.
  • This article focuses on integrated payments, loyalty programs, and automation.
Zoe Murphy | December 18, 2019
Payments

Payments in 2020: Experts share their perspectives on B2B payments, credit cards, faster payments (Part 2)

  • Tearsheet asked leading experts what they expect from the payments industry in the future.
  • This article focuses on B2B payments, faster payments, and credit cards.
Zoe Murphy | December 17, 2019
More Articles