Food delivery drivers last week claimed a win in the ongoing gig economy battle between employers and their workers, who are often classified as independent contractors instead of employees and are deprived of the benefits that come with full employment. Last Thursday, the New York City Council approved a legislative package that, among other things, established a minimum payment per trip for delivery drivers. But for the more than 70% of gig workers living paycheck to paycheck, that money is only good if it’s in their pockets.
Enter Payfare. The fintech company announced on Tuesday a new partnership with Stride Bank to expand its real-time payment (RTP) capabilities for gig workers by leveraging bankers’ connection to The Clearing House Payments Company’s (PayCo) RTP network. The partnership will enable more secure payments that are settled within seconds on a RTP network that operates even after bank hours, on weekends and during bank holidays.
Partnering with Stride will give Payfare (TSX: PAY.TO) access to PayCo’s massive payment system infrastructure. PayCo is run by The Clearing House Association, an organization composed of just about every major U.S. bank, including Bank of America (NYSE: BAC), Capital One (NYSE: COF), JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC).
“We are thrilled to be adding real-time payment capabilities to Payfare’s existing payout and digital banking solutions,” said Marco Margiotta, CEO and founding partner of Payfare. “Our mission is to empower financial security for every gig worker. As the gig economy continues to grow, the RTP network’s broad reach will help us to further scale our solution while providing fast, secure options to our partners and the gig workers we support.”
The fintech company completed an initial public offering on the Toronto Stock Exchange in March, with the company’s active user count growing by nearly 80% from Q1 to Q2 2021. More than 250,000 gig economy workers are active on the platform, more than six times as many as there were a year prior.
Payfare put itself on the map in December 2020, when it partnered with DoorDash (NYSE: DASH) to roll out the DasherDirect mobile banking app for DoorDash drivers, offering them Business Prepaid Visa cards as part of the deal. More recently, the company announced last week that it added Visa’s (NYSE: V) SavingsEdge offering to its platform.
But the addition of PayCo’s RTP network might be the biggest one yet. Since it went live in 2017, a whopping 70% of U.S. deposit accounts have tapped into the nationwide system. Payments powerhouses from Zelle to HSBC (NYSE: HSBC) to PayPal (NASDAQ: PYPL) are linked to The Clearing House’s network, but none of them are focusing on reaching the gig economy like Payfare is.
“While workers increasingly want more autonomy to decide how, when and where they work, they also want more control and flexibility over how they’re paid,” said Steve Ledford, senior vice president of product strategy and development at The Clearing House. “The RTP network is designed to be a platform to support innovation, and Payfare and Stride Bank will offer our nation’s growing gig economy more choice and convenience across the earned wage industry.”