Wise and Payfare team up to bring cross-border money transfers to gig workers in 2022

As the global gig economy continues to grow, so does the demand for fast and affordable cross-border payments for gig workers. Canadian payments firm Payfare recently announced an agreement with British money transfer firm Wise to bring quick, cheap and secure international money transfer capabilities to Payfare’s digital banking platform in 2022.

Starting next year, Wise’s money transfer capabilities will be embedded into the Payfare banking app, which would allow users in the US and Canada to instantly send international payments to over 80 countries around the world. The integration aims to save gig workers time and money when transferring money back home or to friends and relatives.

Founded in Toronto in 2015, Payfare offers instant payout and digital banking solutions for the gig economy. The firm works with major tech companies like Uber, Lyft, and Doordash to enable their workers to access their wages as they earn them, instead of waiting for a monthly or bi-weekly payment cycle.

Wise supports over 11 million consumers and businesses in moving money across borders at the real-time exchange rate, processing over $8 billion in international transactions every month. The Payfare collaboration is the latest in a series of moves by Wise to bring its payments infrastructure to platforms across the US, including Andrews Federal Credit Union, Sony’s The Orchard, and earlier this year, Google Pay.

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Payfare’s founding partner and CEO Marco Margiotta says that previously, whenever gig workers wanted to transfer money to family and friends abroad, they had to rely on legacy services that were costly, inconvenient, and had hidden fees. Margiotta claims that the Wise-Payfare collaboration brings a faster and cheaper international money transfer solution to these workers by providing full price transparency, low costs, and the use of real-time exchange rates.

The pandemic played a major role in the development of the gig economy. Millions of US workers lost their jobs, and up until September 2021, 45% of full-time US employees were working from home either all or some of the time. These structural changes in the economy have caused people to rethink the meaning of work and to reconsider when, how, and where they want to earn money. The increased demand for flexibility and independence has led to the rapid growth of the gig economy over the last couple of years. Research suggests 92% of workers are now considering gig work in various forms.

Ryan Zagone, head of Americas at Wise, says these gig workers have a unique set of financial needs, and he sees a major untapped opportunity for fintech and the payments industry in particular to serve the growing demands of this demographic.

“With millions of people classifying themselves as gig workers, the size and scope of the gig economy shows there’s plenty of opportunity here,” said Zagone. “Speed, real-time payments, low cost and convenience are all critical considerations for this audience. As an industry, this is a chance for us to serve this growing market by meeting all of those considerations.”

Zagone claims that the combined strength and reach of Wise and Payfare will help to bring convenience and financial empowerment to the North American gig economy.

“For the first time, gig workers will no longer need to open and manage multiple accounts across numerous providers for all their payment needs,” said Zagone. “This is especially important for those who have to send money internationally to family and friends on a regular basis.”

Tony Tran, co-founder and CEO of creator-focused fintech Lumanu, believes that the involvement of a major payments player like Wise is an “incredibly encouraging” sign for the gig economy – one that may also compel other payments platforms to get involved.

“It’s so valuable for solopreneurs to have options that streamline how money gets from one party to the next and minimize the number of hops along the way. It makes life that much easier for today’s workers who are increasingly working globally and often need to make international payments without worrying about breaking any laws,” said Tran. “This is an important trend that will grow over time, and I believe other payments players will increasingly be looking to serve the specific needs of gig workers as well.” 

The gig economy may be flourishing, but its rapid expansion is also giving rise to new challenges related to cross-border payments that businesses and employers must overcome so they can continue to onboard competitive global talent and avoid high turnover. These challenges include not just high foreign exchange and transaction fees, but also regulatory nuances around taxation and other legal requirements, as well as cultural differences in expectations and preferences regarding payment methods. Employers who fail to recognize and address these complexities may end up losing out on the benefits offered by the gig workforce.