How Prepaid is Innovating Employee and Gig Worker Payouts

In 2022, driving employee and worker retention remains a top priority for businesses across every industry. But winning over this audience isn’t just about how you pay them, but the method in which you pay them through. 

Taking a page from the faster payments movement, companies in the prepaid space are working to innovate payouts to reduce attrition rates and boost company loyalty. To that same extent, prepaid is being used as a platform to boost financial health by providing fast access to funds. Consumers get away from payday lenders and can ease the financial burdens associated with a high credit debt load.​

There’s a reason prepaid has grown 20% more compared to in the U.S., and remained the second fastest growing payment method in Canada over the past two years. Prepaid supports payments innovation that is helping consumers and businesses spend, save, invest and move money – all using the existing payment rails. ​

Prepaid is also a key driver behind real-time/early-earnings access as prepaid has increasingly become a platform to support on-demand pay or earned wage access.  Prepaid enables everything from anytime access during the pay cycle and two-day early access to payroll to same-day earnings to access right after every shift. ​

As hourly workers — whether they are employees or part of the gig economy — demand fast, digital access to their pay, this has forced companies across all industries to invest in new, innovative ways to payout their workforce. Increasingly, prepaid is being used as a platform to boost financial health by providing fast access to funds. Consumers get away from payday lenders and can ease the financial burdens associated with a high credit debt load.​

To that same extent, prepaid is bridging the gap for nonfinancial businesses looking to support their employees and customers through new, innovative digital payment and payout methods.​ Because prepaid has the capacity to boost financial inclusion among gig workers, this has attracted more companies in the space — including everyone from tech giants and big retailers to first time e-commerce players. 

How Prepaid is Changing When and How People Get Paid

Prepaid platforms are also changing how and where people can access their wages, and the timeline they can get access to those wages.. For instance, in Canada companies like Ceridian — through its Dayforce Wallet — provides employees access to their earned wages on-demand, with a mobile app and prepaid card​

Providing access to these types of digital tools — and connecting them with a prepaid card — is one way companies are helping their employees and workers take better financial control over their lives. Instead of being boxed into a payment option that doesn’t fit their needs or lifestyle, prepaid offerings are changing the game for consumers who have previously been left out of the mainstream financial ecosystem. 

This topic continues to be a hot discussion item across the payments ecosystem. At the 2022 CPPO Prepaid Symposium, Matthew Spoke, CEO of Moves Financial, shared his take in a fireside chat with CPPO Board Chair Karen Budahazy about how companies can innovate same-day payments in the gig economy to provide benefits that were previously only offered to traditional employees. 

In Canada, Spoke explained how the gig economy has evolved in Canada, which has created more use cases for payments companies to address. This extends to payments, as he noted there used to be “a safety net around employment payments’ ‘ that don’t always translate over to fractional freelance work. This exposed holes in the system that has created more room for innovative gig worker payout solutions to enter the market to support more workers.

During the pandemic the gig economy exploded, Spoke said, which “accelerated the specialized end of the market” — paving the way for new, innovative digital payout solutions to gain traction. The key to winning out in this marketplace, he noted, is providing easier access to employee and worker payouts, which includes when and how they are paid. 

“There’s a good reason to be working toward faster access to money,” Spoke said, but noted that companies must move away from just solving instant payout needs and work toward providing long-term healthy financial habits. This is another area prepaid is looking to innovate.

Today, prepaid as a platform has gone beyond just a payment mechanism as it is extending the benefits of digital payments access to help people do more than just get fast, digital access to their pay. Prepaid is also providing value-added services through companies that help people tap into a prepaid solution to help them budget, avoid overspending and build savings with money management solutions. 

For companies looking to innovate employee and worker payouts, it’s important to leverage payment options as a way to reduce attrition and boost loyalty. When a company can use payout solutions to hook into something as personal as a person’s earnings, this is one way for organizations to better connect with their workers, while allowing those same workers better control over when and how they get paid.


Scroll to Top