What are Payment Challenges in the Gig Economy?

The gig economy refers to the collection of markets that focus on a gig or job to match providers to consumers. The basic model involves gig workers entering into formal agreements with on-demand commerce or companies to provide products or services to the company’s clients.

Alan Safahi, an experienced entrepreneur and founder of a San-Francisco-based startup company, says that the gig economy will become a mainstay worldwide, especially during the Covid-19 pandemic.

Alan Safahi Orinda has done substantial research on the proliferation of on-demand products and services. The leading entrepreneur says that sharing economy will change the way people live, work, and spend money. Safahi’s research shows that freelancers will make up 50% of the U.S workforce within one decade.

Although freelancing and the gig economy offer various benefits, this type of niche or work involves trade-offs. While people work on-demand and multiple jobs with independence and flexibility, they experience volatility in payments. Read on!

Lack of Access to Payment Methods

According to Alan Safahi, most people who use cross-border payments in the gig economy face numerous challenges. Lack of access to payment methods is the biggest challenge faced by gig economy workers. For instance, funds transfers through global payment processors, Fintechs, remittance companies, and banks do not favor freelancers and gig economy workers.

For instance, PayPal is the most popular platform for gig economy workers in most countries. However, the company does not offer services in over 80 countries worldwide, making it challenging for people to pay and receive funds.

Payment and Transparency Issues

According to Safahi, about 75% of gig-economy workers would stop selling their products and services and leave the industry if the authorities fail to resolve the current payment issues. Gig economy workers and freelancers look for better and advanced communication and business support services, especially when there are problems with payments and delays.

Gig economy workers likewise crave greater transparency and streamlined accuracy with payments. Safahi says that the biggest challenge for such workers is not having a solid platform to monitor their financial transactions. However, the good news is that some banks in the U.S offer a feature like cash-bank and multiple currencies wallet to millennials.

Excessive Delays and Fees

High fees and commissions are some of the biggest challenges faced by gig economy workers when receiving payments. For instance, lack of transparency in charges, slow settlement speed, and fluctuating foreign exchange rates are a massive frustration for freelancers or gig economy workers.

Safahi says that online marketplaces have segmented their payment models into B2C and C2B strategies. The time lag is usually caused by intense banking regulations, automated clearing house (ACH) transfers, and foreign exchange rates.

Final Words

Alan Safahi Orinda argues that pre-Covid-19 and post-Covid-19 regulations remain the same for gig economy workers. Like other businesses, gig workers worldwide have been highly affected by the crisis brought by the pandemic. Safahi suggests banks, private companies, and payment processing platforms review their strategies and streamline payment processes for gig workers and freelancers.

Originally Posted: https://safahi.com/what-are-payment-challenges-in-the-gig-economy-ad9beabd3dbf