Mastercard Extends Its Real-Time Push-Payment Service to Workers in the Gig Economy

As the gig economy grows, so does workers’ need for quicker access to their wages than they can get through traditional payroll schedules.

To facilitate faster delivery of wages to gig and hourly workers, Mastercard Inc. has partnered with Memphis, Tenn.-based Evolve Bank & Trust to push wages in real time through its Mastercard Send platform to any debit card issued in the United States. Branch Messenger Inc., a Minneapolis-based provider of pay advances, is also partnering with Mastercard and Evolve bank, Mastercard announced Wednesday.

Using the new service, Branch says it will fund pay advances on behalf of employers. Employers will settle with Branch come payday. Employees making use of the service are charged $3.99 per instant advance. Limits on the amount to be advanced will be determined by individual employers.

Mastercard Send is the brand’s real-time push-payments network. Through it, Mastercard has worked with banks, businesses, and digital wallets to deliver funds to bank accounts, prepaid debit cards, mobile wallets, and select cash-out locations.

With gig workers paid only when an assignment is completed, which could take weeks, and hourly workers not always having a set schedule, many are taking pay advances if they can, observers say.

“Gig workers typically live paycheck-to-paycheck and are paid when an assignment is completed, which could mean waiting for several weeks for payment,” says Jess Turner, executive vice president for digital payments and labs at Mastercard. In the meantime, they have expenses to cover, while a significant portion have little or no savings.

“Pay advances help workers get paid sooner for work they have accomplished and that helps to avoid financial hardship,” notes Sarah Grotta, director for the debit and alternative products advisory service at Mercator Advisory Group.

Ride-share drivers are a good example of gig workers who can benefit from pay advances, as they have operating expenses, such as gas and tolls, that if not met will keep them off the road and not earning until their next payday, Grotta says.

Creating easier access to pay advances can also help employers in the gig economy retain workers. “There is high turnover among hourly and gig workers and employers that provide this flexibility have a better chance at retaining employees and attracting new ones,” says Atif Siddiqi, chief executive at Branch.

Both Mastercard and Visa Inc., with its competing Visa Direct service, have been finding increasing uses for their real-time push-payment networks. These services allow financial institutions to fund debit cards in a matter of minutes via a technique called an original credit transaction, which was originally designed to handle in-store refunds for cardholders.