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How can platforms can distinguish themselves by providing exceptional payment services to the gig, creator and freelance economies?
What are their needs? How do they want to be paid? What will differentiate a platform wanting to meet these needs and payment demands?
The freelance economy consists of self-employed, skilled people who run their own businesses, providing an array of services to companies worldwide. Freelancers are not as reliant on platforms as creators and gig workers and build their organisations around their talent and proven track records. However, they want smoother payment experiences and better management of their finances and cash flow.
The gig economy is more closely associated with part-time or short-term roles such as contractors, drivers, substitute teachers, etc. While many of these roles can also fit into the freelance category, gig workers are paid per contract or task. This does seem very close to freelance work, and there is crossover, but freelancers operate more like SMEs, while gig workers operate more per task.
The creator economy is more about building brands and communities through platforms and social media channels. It is powered by influence and presence and those who succeed in this space are often known as influencers.
While the three different types of economy connect with customers in different ways, the workers within these economies all demand better payment management solutions and protections. They want solutions that allow them to connect more effectively with their customers, find new opportunities, and expand their brands into new markets while retaining better control over their finances, cash flows and admin.
Until recently, freelance and gig workers have been paid through traditional channels. However, while useful and mostly reliable, these payment types can be tedious to manage. As a result, freelancers and gig workers struggle with cashflow issues because their funds take ages to clear or their clients haven’t taken the time to pay them.
Complicating this already challenging space is the fact that most freelancers and gig workers are paid per task or per hour, or per project, so they may have to wait until a project is completed before they get paid. And then they have to wait even longer for the payments to clear.
CON: There is one thing that can be said about traditional payroll - slow, admin intensive, time-consuming and frustrating. Freelancers or gig workers that are put onto a company’s payroll have to fill in vast quantities of paperwork that include anything from proof of identity through to proof of address and tax authority registration documents. It can take upwards of a month for a person to be completely onboarded within the platform and then it can take up to two months for invoices to be processed. In short, it is slow.
PRO: Once onboarded, payments are usually regular and reliable. The freelancer or gig worker is in the system and is likely to be the preferred service provider because they have already jumped through all the corporate hoops.
CON: Payment via automated clearing house can take several days to clear which means that any freelancer or gig worker in need of money will have to wait. It is slow and can be very frustrating. There are also fees associated with these payments that can end up being the freelancer’s problem - transaction fees and international currency charges as well as currency conversions can add up.
PRO: It is a trusted and reliable payment route that goes through a trusted and reliable financial institution and that has checks and balances in place if funds go missing or aren’t paid into the correct account. This does add a measure of security to the process.
CON: These introduce a high risk of fraud or theft and lack the required paper trail that’s needed to pay taxes or manage accounts. For freelancers and gig workers, this can add a lot of admin to their already punishing admin burden.
PRO: Cash is immediate which makes it a preferred option for those who rely on regular payments to get by.
CON: Platforms paid attention to the problems gig and freelance workers were experiencing with their payments. Innovation set in. Competitive payment solutions emerged. Digital and crypto-based solutions sprouted across multiple channels and made it far easier for people to get paid, instantly. However, many of these platforms are susceptible to fraud and come with transaction charges, making them expensive for many gig and freelance workers.
PRO: These payment solutions are relatively easy to use and allow for rapid payments across multiple countries and currencies with ease. They can be integrated into existing platforms or they can be used as standalone solutions that allow for companies to easily manage their gig or freelance worker relationships.
The true value of digital lies in the embedded payment revolution. Embedded payments can be easily integrated, white-labelled and used by platforms to create payment flows that enhance the relationships between gig workers and their clients. Embedded payment solutions create the stickiness that platforms need while providing automated, real-time payments within a superb user journey that sits under the platform’s brand.
Embedded payments are designed to transform payments from complicated, time-consuming and tedious into quick and easy. Gig and freelance workers get paid instantly and have access to the paperwork and accounting information they need to stay ahead of their admin. This improves their cashflow and financial management and it makes it far more likely that they will remain loyal to your platform - why go anywhere else when everything is right where they need it?
It’s also worth considering an escrow service that’s designed to protect both your platform and your users. This allows for funds to be released either incrementally or on completion of a long-term project to ensure that all part ies are protected and the funds secured.
Embedded payments give the creator, gig and freelance economies the control and visibility they need to improve their cashflow, wealth management savings and accounting. Platforms using a trusted third-party embedded payment solution can white-label it, customise it and provide gig and freelance workers with a trusted payment solution that gives them financial and emotional security because they can access their payments immediately.
The gig economy, the freelance economy and the creator economy are still showing solid growth despite challenging times. Investing into an embedded payment solution makes it so easy for your platform to connect with this growing market by providing a digital solution that makes payments easy, and that resolves the challenges that traditionally limit engagement and payments.
Gig workers use marketplaces and platforms to bid for jobs and connect with new customers. Freelancers use platforms to grow their brands and their businesses. Both need embedded finance that makes it easy for them to manage their funds and their customers.
As a platform, your use of a white-labelled embedded finance solution such as UNIPaaS, means that you can provide gig workers and freelancers with reduced stressed, reliable flexibility, and exceptional technology.
UNIPaaS offers:
With UNIPaaS, gig workers and freelancers say goodbye to delays, frustration, excessive admin, and slow payments as they enjoy immediate and trusted payment services and capabilities.
UNIPaaS collaborated with Beelivery to solve errors in operations and billing. The company was using three payment platforms to complete an end-to-end flow, had a high rate of payment failure, and pre-authorisation was taking up to three days to release the funds. The company wanted a solution allowing instant orders and payments, instant refunds, and instant payment to drivers. Beelivery turned to UNIPaaS and transformed its entire payments process, especially for gig workers who relied on the platform for wages.
Discover how UNIPaaS changed the world of payments for gig workers at Beelivery and how you can step on the path to transformative payments here.
UNIPaaS Financial Services Limited is regulated by the Financial Conduct Authority (FCA) as an Authorised Payment Institution (No. 929994). UNIPaaS is certified as PCI DSS service provider Level 1.
