The gig economy has upended traditional employment models, offering unparalleled flexibility through short-term, contract-based work and contributing significantly to the global economy. However, these high-volume platforms face unique financial hurdles—from managing cash flow intricacies to ensuring timely payments. Enter Akshay Rawat, a seasoned strategist who delves deep into these challenges, offering solutions that help maintain the financial viability of gig platforms.
With a strong foundation in engineering and entrepreneurship, Akshay has established himself as a key problem-solver in the financial landscape of the gig economy. He emphasizes the unique complexities gig platforms face, particularly the time gap between receiving customer payments and compensating workers. By focusing on simplicity, people, and iterative feedback loops, Akshay has driven innovation and growth in fintech, helping gig platforms thrive in a competitive marketplace.
Cost-Saving Payout Strategies
At Checkr Pay, Akshay has implemented a variety of payout methods tailored to meet the needs of gig workers while keeping costs manageable for platforms. One effective option is direct deposits, particularly standard ACH transfers, which are often free or low-cost but come with slower transfer times. For platforms willing to invest in infrastructure, card programs are another viable alternative, allowing gig workers to receive earnings through a debit card linked to a bank account. This method offers real-time, 24/7 access to funds via a book transfer between the customer's bank account and the earners within the same bank, eliminating transfer delays. However, challenges like card loss or inactive accounts may still arise.
Akshay's approach emphasizes flexibility and speed, understanding that for many gig workers, fast and predictable access to earnings is paramount. He explains, "More payout options can help such earners make the cost and speed tradeoff decisions," which in turn enables platforms to differentiate themselves in a competitive market. This balance between cost-efficiency and speed helps gig platforms sustain their competitive edge while attracting and retaining top talent.
Balancing Speed and Fees in Payments
Tailoring payment methods to the specific needs and preferences of gig workers is crucial for striking the right balance between fees and speed, according to Akshay. Different gig verticals require distinct approaches. For example, "gig nurses may consistently make over $1500 per month," making them less sensitive to fast payment methods compared to delivery workers who may prefer quick, lower-cost payouts. By understanding factors like the average payout amount and payment frequency, platforms can offer solutions that match the earners' financial habits.
Platforms must also consider the ease of verifying payout destinations. Methods like "Push to card" simplify the verification process. Akshay highlights that offering multiple payout options, typically one free and one fast/instant, is essential as gig workers often trade-off between fast with fees and slow but free. This flexibility ensures a more tailored and cost-efficient experience, boosting both worker satisfaction and platform success.
Solving Cash Flow Issues
Cash flow challenges are prevalent for high-volume gig platforms, particularly when payouts to gig workers occur faster than the settlement of incoming payments from customers. For instance, gig companies may pay workers instantly while charging customers via credit cards, which takes 2–3 days to settle, creating a temporary cash shortfall. As Akshay explains, "payouts are made before pay-ins settle," forcing gig companies to back the payouts themselves, leading to potential shortfalls. This issue is especially significant in industries like healthcare, where traditional facilities often operate on bi-weekly or monthly payment cycles, further delaying cash inflows.
To address these challenges, automation plays a key role in tracking and predicting cash flow. Real-time low-balance notifications alert businesses when their reserves are nearing depletion, allowing proactive measures to avert shortfalls. Additionally, machine learning can analyze past cash flow patterns to help businesses forecast future needs and avoid cash crises. Akshay also emphasizes the importance of solutions like Checkr Pay's cash flow shortfall features, which provide immediate funding when external capital is needed to issue payouts, ensuring smooth operations during financial crunches.
Unlocking New Revenue Streams
Gig platforms have several opportunities to generate additional revenue by offering premium services and value-added features. One effective approach is charging a fee for instant transfers through certain methods. As Akshay notes, "the gig platform may hold the worker's earnings till the earner decides to cash out," allowing the platform to earn interest on the funds while they remain in the account. Another promising revenue stream is interchange fees, where platforms issuing debit cards can take a cut from transactions.
Referral partnerships for services such as tax filings and employment benefits can also drive new income while benefiting gig workers. Additionally, as the gig economy becomes more global, cross-border payment services that handle currency conversion and international transactions present significant market opportunities. Offering card benefits like cashback or insurance is another way platforms can enhance their value proposition, particularly for those issuing branded cards.
The Impact of Instant Payouts
Premium instant payout options have a significant positive impact on gig worker engagement and overall revenue growth. According to a study, 72% of workers would recommend their gig platform if real-time payments were available, and 70% would take on more shifts for quicker access to earnings. This illustrates how faster payouts directly increase worker satisfaction and productivity, ultimately driving higher platform engagement. Additionally, 89% of gig workers favor signing up for real-time payments, indicating strong demand for these flexible, immediate payment options.
Akshay emphasizes that real-time payments not only boost engagement but also enhance loyalty, as workers with urgent financial needs prioritize fast access to their earnings. Platforms offering instant payouts can benefit from increased retention and loyalty while also tapping into new revenue streams by charging fees for these premium services. By meeting the growing demand for real-time access to earnings, gig platforms can strengthen their competitive edge and improve overall financial performance.
A Case Study in Payment Innovation
A compelling example of Akshay's strategies for improving the financial health of a gig platform is the partnership between Checkr Pay and VitaWerks, a gig platform for licensed professionals. According to Shweta, CEO of VitaWerks, the company chose Checkr Pay for its deep understanding of the unique challenges in the gig economy. With Checkr Pay's solution, VitaWerks was able to run batch payouts for hundreds of earners at once, significantly improving the efficiency of their payment system.
The swift payout process was another major advantage, allowing earners to receive their funds in a very short time. This streamlined payment system not only increased operational efficiency but also contributed to higher satisfaction among gig workers. VitaWerks praised Checkr Pay's responsiveness and customer-centric approach, highlighting how Akshay's strategies created a win-win situation for both the platform and its workers, ultimately strengthening the platform's financial stability and worker retention.
Future Trends in Gig Payment Technology
The future of financial performance optimization in gig businesses will be heavily influenced by the adoption of real-time payment technologies. As Akshay points out, "RTP and FedNow will see greater adoption by banking networks," reducing costs for integration and enabling gig platforms to offer faster, more reliable payment options. This shift will significantly improve cash flow management for businesses, allowing them to streamline payouts while minimizing delays.
In addition to real-time payments, tackling fraud will be a critical focus. With the growing adoption of instant payment methods, Akshay highlights that tackling fraud in real-time payments is an emerging field and a big challenge. As solutions like sift.com and sardine.ai become mainstream, they will play a vital role in ensuring the security and efficiency of payment systems, further optimizing financial performance in gig platforms.
The Next Big Shifts in the Gig Economy
Over the next five to ten years, the gig economy is set to expand rapidly, with a sharp rise in both the number of gig companies and individuals taking up gig jobs. According to Akshay, "We can expect many more small gig businesses to emerge," thanks to the adoption of products that make it easier and cheaper to start and manage gig platforms. This shift will also normalize low-cost instant payments, enabling new systems to be the default for gig workers and eliminating the need for predatory payday loans.
International gigs will also play a larger role, creating a demand for faster international payment solutions that can handle country-specific tax regulations and currency conversions. As Akshay notes, fraud solutions for gig work will become more prevalent and cheap, ensuring both platforms and workers are protected. Additionally, large payroll providers will develop instant payment features that unify the payment experience for full-time employees and gig workers, further enhancing the financial landscape of the gig economy.
Akshay advocates for innovative yet practical solutions to financial challenges in the gig economy. His strategies—such as leveraging real-time payments and anticipatory cash flow management—aim to reduce the fiscal burden on gig companies while adapting to a dynamically expanding sector. As more individuals turn to gig work, Akshay predicts developed systems will become standard, replacing outdated models. With continuous adaptation to emerging trends and technology, gig platforms can sustain their growth while supporting their workforce sustainably.
