Digital payment technology is changing fast. We’ve identified four major trends to help your business meet customer and employee needs and boost competitiveness in a difficult marketplace. Read on to learn how Earned Wage Access, Instant Tip Payments, Virtual Cards, and Digital Disbursements will revolutionize digital payments.
We all want faster, more convenient ways to access our money and to make or receive payments. Financial technology is evolving very quickly, resulting in exciting changes to how we interact with money.
If you run a business, this digital transformation is even more important, giving you more ways than ever to take payments from customers, make payments to staff, and speed up your cash flow. We know it’s a lot to keep up with—but we’ve got our ear to the ground.
We’re happy to share some of the most important upcoming trends and how your business can take advantage.
Let’s get into it.
Immediate Access to Earned Wages is Great for Employers and Employees
Earned wage access is becoming an essential benefit for temporary, contract, and other workers. This is great for your employees because:
- They can get access to their earnings as soon as they complete a shift.
- They don’t have to wait for a weekly, bi-weekly, or monthly paycheck.
- It relieves financial pressures, which can help them focus on their jobs.
Earned Wage Access Benefits for Employers
This payment technology also has significant benefits for you as an employer:
- Maximize productivity in your workforce so they can get more done.
- Encourage workers to turn up for shifts and contract work as they’ll get paid once their work is finished.
- Boost your employer brand and attract workers in a difficult jobs market.
“Earned wage access increases employee retention by 36%. PwC found that 43% of workers spent 3 or more hours per week thinking about or dealing with financial stress. At an average wage of $17.50/hour, that translates to over $2,600 of lost productivity per employee per year.”—Employee Benefit News, Earned wage access: the most important benefit in a post-COVID-19 world.
How to Take Advantage of Earned Wage Access
Earned wage access is most effective when it’s paired with a prepaid payroll card. This lets you load wages immediately and lets your employees use the card straightaway to pay bills and make purchases. Prepaid payroll cards are super easy to administer and will reduce your HR costs and elevate your brand.
Our dashPayroll Card provides other benefits including mobile wallet access, personal savings vaults, discounts, loyalty programs, and more.
Instant Tip Payments Reduce the Stress on Restaurant and Service Workers
Tips and gratuities are an essential financial lifeline for employees across the service industry. With many service employees working two or more jobs, Instant Tip Payments can significantly reduce financial stress.
- Service workers rely on tips and gratuities for more than half their income, on average.
- They are low-paid workers, resulting in significant financial stress that can impact productivity.
- Having to take cash to the bank to deposit is inconvenient.
- If they don’t have a bank account for online payments, they would need to visit a store and pay cash, which is very inefficient.
Instant Tip Payment services reduce employee anxiety by providing immediate access to gratuities, no matter how the customer paid.
Instant Tip Payments Benefits for Employers
Just like Earned Wage Access, Instant Tip Payments aren’t just for the employee’s convenience and peace of mind – they can significantly benefit employers too. Many of the benefits of Earned Wage Access apply to tips and gratuities, but there are some benefits unique to offering immediate access to tips.
- Paying by cash isn’t just a burden for customers, it’s also a pain for employers. Moving to card and other digital payments is more convenient for restaurants, hospitality staff, and diners.
- Offering instant tips reduces the administrative burden on service industry employers, including HR administration, trips to the bank, and dividing up tips between staff.
“Waiters and bartenders earn more in tips than they do from what employers pay them as an hourly base wage. The median share of hourly earnings that come from tips account for 58.5 percent of wait staff’s earnings, and 54 percent of bartenders’ earnings. The median monthly tip earnings for wait staff and bartenders are $867, suggesting that many of these workers depend on their tip earnings to pay for essential expenses such as rent and utilities.”—National Employment Law Project, Wait staff and bartenders depend on tips for more than half of their earnings
Virtual Cards for Payments Replace Paper Checks and Enhance Security
It’s hard to believe, but the traditional paper check is still holding on, with millions of checks mailed out every day. Fortunately, there is a better way. Increasingly, businesses are moving towards virtual payments and cards to send money instantly and securely.
- Companies can make promotional and incentive payments to customers using virtual cards. The recipient is notified when the payment has been posted and can redeem the funds immediately online.
- Businesses can use virtual cards to make payments to vendors. A single virtual card number is sent securely to the vendor, who can then redeem the funds immediately. The card expires as soon as the payment is processed.
Digital Disbursements Get Funds Into the Hands of the People Who Need Them, Fast
Finally, if there’s one thing the pandemic has taught us, it’s that rapid access to funds is essential to the survival of small businesses, individuals, nonprofits, and partner organizations. The disbursement process of getting money from one party to another can be slow and cumbersome, especially if it involves paper checks.
Digital disbursements solve this problem by replacing checks with digital or prepaid cards to make faster and more secure payments. This saves businesses time and money, and gives payees quicker access to their funds.
- Make faster payments to customers, business partners, nonprofits, and other organizations.
- Reduce costs associated with paper checks by using digital or prepaid cards for disbursements.
- Provide a better experience and quicker access to funds for payees.
- Improve cash flow with faster payment redemption.
- Streamline reconciliation with real-time reporting.
These four digital payment trends will alter the financial landscape for many businesses. It’s time to look at what’s coming over the horizon and make changes now so you can stay competitive, support your employees, and build trust with your customers.