As demand continues to rise for short-term contracts or freelance work which provides for more flexible and temporary working environments, the gig economy is shaping up to be more prevalent in the digital era. Technological advancements have provided new platforms for people seeking such employment without the pressure of a 9 to 5 workday. The gig economy has become a preference for housewives and university students, who need to prioritise their family and studies while also looking to earn an extra income. On the business front, it is simpler for those with limited budgets such as start-ups, to opt for part-timers or temporary employees to take care of busier times or specific projects as and when needed. Being able to rely on individuals with flexible contracts, businesses don’t have to go through the hassle of hiring under full time employment, which allows them to optimise operational cost efficiencies. Long-term employees will require additional operational cost such as employee benefits and claims, which is a consideration that is not required with a gig worker. Even before the pandemic, a McKinsey report¹ highlighted that 70% of independent workers chose this route because of the flexibility afforded to them and saw it as an additional source of income. In Malaysia, the government has identified the gig economy as a new source of economic growth which would be made part of the 12th Malaysia Plan 2021-2025, further contributing to the gross domestic product (GDP) of the country². We can clearly see that the gig economy has been booming and will continue to grow in the coming years, but with it also comes its own unique set of challenges.
Payment challenges of the gig economy
Despite the constant growth of the gig economy sector, there is a vast disconnect between gig workers’ workload and the payment method that needs to be addressed. As gig workers are considered vendors, companies will prioritise their long-term employees when it comes to payment terms, which can result in delayed salary payouts for gig workers. Gig workers often struggle with cash flow and can be hit hard by irregular payments, hence minimal delay is vital to avoid creating unnecessary pressure. Most companies go the traditional route of paying their employees via bank transaction or cheques, which can be rather time-consuming. While it is considered more secure and safe, it takes longer to process which can be inconvenient for gig workers, especially when they need access to funds promptly. As more digital payment methods are being introduced in the market, companies should relook their payment methods and invest in a more efficient approach. Businesses that rely on gig workers should be aware of the right payment tools and implement them to build stronger relationships between companies and gig workers, as almost half of the respondents from a PayPal survey shared that they have experienced not getting paid for their work³. Kiplepay Sdn Bhd, a subsidiary of Green Packet, offers enterprise solutions for businesses to go cashless from white labelled e-wallets to eKYC, payment gateways and Kiple Visa prepaid card solutions. With Visa’s network of 70 million merchants in over 200 countries and territories, businesses can do away with costly merchant acquisition costs. These e-payment platforms can be rolled out as quickly as four months, accelerating five times their speed to market from the usual 24-month lead time. As a Visa Ready Certified fintech partner, Kiple also offers businesses prepaid issuing bank identification number (BIN) sponsorships in Malaysia, which does away with the hassle of needing to fulfil the Visa Ready criteria. The recent launch of the Kiple Visa Prepaid Card by Kiplepay is able to solve the payment gaps in the gig economy and therefore keep the gig economy sustainable in the long run.
Speedier payments upon job completion
With the Kiple WaaS solution and Kiple Visa prepaid card, faster, smoother and more efficient salary disbursement can be made possible. Quicker payouts will help both gig workers and companies — gig workers can get paid in a shorter period to avoid financial difficulties, and companies can avoid time-consuming and expensive reimbursement processes. Employers no longer need to collect sensitive information from gig workers such as bank account details that are required for a direct deposit, thereby enabling them to maintain a stronger and more trusting working relationship. Moreover, the Kiple Visa prepaid card allows salary payouts to be made directly to the receiver’s e-wallet account, which can be done and processed more quickly compared to collection of cash or cheque at the company.
Facilitating reimbursement and claims
To avoid out-of-pocket expenses for gig workers, the Kiple Visa prepaid card can enable the company’s finance department to better track spending and reconcile expenses, when unexpected purchases are needed. This can be done by presenting employees with a fixed spending amount preloaded into the prepaid cards for necessary expenses. With Kiple Visa prepaid cards, they can make these purchases without dipping into their personal finances. The card allows gig workers to eliminate the step of holding physical receipts for reimbursement of out-ofpocket expenses and eliminate the need for employers to review manual receipts and expense reports. The company’s finance department will be able to keep tabs on budgets, provide real-time insights and can issue pre-set controls that limit the budgets available, on Kiple’s Reporting Portal.
Tapping into new gig payment opportunities
Businesses can leverage on these new cashless payment solutions as means to better monitor and organise the cash flow for gig workers hired, whilst also participating in the digital economy. With Kiple, businesses have been able to experience the benefits of going digital through this cashless payment solution. For those who have digital delivery platforms, they can leverage on Kiple’s WaaS solutions to disburse commission for riders via their e-wallet account, so they are able to receive it seamlessly without any hassle. With Kiple WaaS solutions, businesses can have their own e-wallets for such disbursements and cobrand their own Kiple Visa prepaid card for employee usage. This is further paired with a portal for companies to utilise the track and report feature to generate reports on their riders, monitor their performance based on the commission earned and generate additional reports for accounting purposes. Kiple Visa prepaid card is committed to providing a more effective and efficient payment solution for the gig economy for both employers and workers, while also benefiting the community and advancing the digital nation. To learn more about Kiple Visa prepaid card, visit kiple.com/enterprises.