Payments innovation is no longer driven by huge banks with coast-to-coast branch networks but by smaller, entrepreneurial providers with the vision and passion to democratize payments and embed them into business operations.

But how do these startups, innovators, and smaller providers get into the game in a way and at a cost that’s accessible? To answer that question and learn more about how the new Galileo Instant Solution helps businesses support gig workers, PaymentsJournal sat down with Cole Wilkes, Managing Director, Galileo Instant at Galileo Financial Technologies and Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group. 

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The U.S. gig economy

While there’s no universal definition of what qualifies as gig work, there have been studies that have attempted to measure the size of the 1099/gig economy workforce in the United States. Even studies using the most restrictive definition of what qualifies as gig work estimate the gig workforce to be at least 26 million people strong. High estimates have measured the gig workforce to hover around 57 million individuals.

The wide range of estimates, explained Grotta, is due to “a variation in what really constitutes a gig worker.” There are also different segments of the gig industry. Some individuals use gig work to supplement their traditional jobs, while others do occasional freelancing on the side; some consider themselves business owners, and others are working for a single employer as a contracted worker. Regardless of the exact number, Grotta added, “This is a really big market—and one that requires unique payment solutions.”

The gig economy gap

Gig economy workers have traditionally relied on legacy payment methods, such as paper checks and ACH payments, to receive compensation. But these forms of payment are plagued with latency, infrequency, and inaccessible funds.

In other words, legacy payment methods are not meeting gig workers’ needs, particularly when gig workers are stuck waiting for their next paycheck. “In some cases, [their payment] is as infrequent as once a quarter,” noted Wilkes. “With the dependence on physical checks, there is a lot of room for improvement.”

As a result, non-fintech businesses are now expressing interest in creating their own cards and accounts for customers and workers to alleviate a pain point for gig workers by enabling them to get paid and transact in new and innovative ways.

Galileo Instant