Why the growing demand for real-time payouts matters to platforms, marketplaces, workers, and shoppers

The boom of the gig economy has fueled this growth in real-time payments. As World Bank reported, the number of global online gig workers increased 41% from 2016 to 2023. Now, online gigs account for up to 12% of the global work force.¹

That’s why it’s so important for online platforms and marketplaces to provide fast, real-time payouts — whether they’re paying freelancers, gig workers, and suppliers, reimbursing customers, or sharing revenue with sellers. Providing this convenience can help increase customer satisfaction and reduce churn, keeping business running smoothly.

Read on for more information about the growing demand for real-time payments and how PayPal’s Hyperwallet can help streamline payout processes across the globe.

The problem with slow payouts

Online marketplaces and gig economy platforms depend on retaining freelancers and sellers to survive. Slow, expensive, and complex payment methods can threaten that survival, frustrating payees and causing them to leave for more reliable business platforms.

Historically, B2B payments were made with checks — a cumbersome process. By relying on paper checks, global customers would have to wait several days to receive payment via snail mail and then find time to go to their bank, make a deposit, and wait for the funds to be verified and show up in their account.

More recently, businesses have been using bank transfers to pay vendors. Still, this process isn’t instantaneous. Sellers or freelancers, particularly in the gig economy, may prefer more modern, digital, and convenient payment methods. The problem is that many businesses haven't evolved past these outdated solutions yet. According to PYMNTS, manufacturers, insurers, and real estate companies still make more B2B payments through ACH than through real-time solutions.²

Going forward, businesses that still rely on slow payment solutions may risk losing valuable talent to marketplaces that do offer more reliable, real-time payout options.

Meeting the growing demand for speed and choice

Consumers are now driving the demand for real-time gig economy payments as they seek a more seamless and convenient online checkout experience.

The numbers don’t lie: According to PYMNTS, 61% of millennials surveyed want real-time marketplace payments because they’re user friendly and offer instant access to funds. Many also prefer faster, digital payment options because they’re easier to track.³

For online marketplaces, enabling fast and flexible platform payouts has become a necessity, not just a nice-to-have. Those that fail to adapt risk getting left behind by the competition and the evolving payments market. As Allied Market Research reported, the global cross-border payments market is expected to reach $356.57 trillion by 2032, increasing at a compound annual growth rate of 7.3% from 2023.⁴

The power of real-time payouts

Deloitte predicts that real-time payments could replace $18.9 trillion in US ACH and check-based B2B payments by 2028.⁵ It's easy to understand why: With real-time payouts, businesses can instantly transfer funds to accounts for freelancers, independent consultants, marketplace sellers, and contractors. This can help businesses:

• Improve cash flow management. You won't have to wait days or weeks for funds to leave your account and be transferred to a payee's account. Instead, send funds immediately and keep your records updated in real time.
• Increase satisfaction and loyalty. Leverage real-time solutions to provide frictionless payments and improve customer experiences, enhancing loyalty among your most valuable freelance workers and vendors.
• Boost their brand image. Show payees that they can trust and rely on your business to deliver fast, secure payments after they provide goods or services.

That’s why businesses across industries are evolving to provide more seamless gig worker payments. As PYMNTS reported, 81% of large retailers say real-time payment options are very or extremely important for completing B2B transactions.

The benefits of offering near-instant payouts

Faster payments are the foundation for future transformation — and momentum is building. It’s essential for businesses to understand the biggest benefits of real-time payments, including rapid access to funds and receipt validation, broader choice of payout options for global customers, wider reach across the talent pool, and tighter security.

Diving in further, here are key points you should consider to re-enforce engagement and prevent attrition from your sellers and customers:

Reduced overhead and a streamlined workflow

Instant payments offer a unique sense of clarity due to their inherent speed. Given the quick nature and volume of tasks gig workers can fulfill in a day, an instant payment can be the difference between clarity and confusion when these workers reconcile what they’ve earned from their efforts.

For example, imagine a rideshare driver who gives five rides on a Monday and four rides on a Tuesday. With instant payments, the worker can quickly reconcile what they’ve earned per day, streamlining their workflow and overall accounting.

Traditional payments on the other hand, can be confusing for the driver because of the potential lag time between the work they performed and the payment received for that work. If payments are delayed by days, it’s harder for the driver to understand which payment was made for each ride on any given day. This can cause accounting confusion and friction. The driver might need to request support inquiries because they may not recognize the amount, the description, or other information tied to the payment, causing potential friction for payer and payee.

Greater speed

Simply put, the faster customers get their funds, the more satisfied they are and the more loyal they can become to your business. That’s why, according to PYMNTS, 89% of large retailers say speed is a top reason for adopting real-time payouts.⁶

Today, it may not be enough to just have a business model that centers around the fast delivery of products or execution of services. Business should also have a payout structure set up to match that efficiency.

Broader choice

Customers don’t just want fast and convenient payouts. They also likely want varied and flexible options for how they receive and track their funds. This might be why digital wallets like Venmo and PayPal have emerged as popular payment options for freelancers in the gig economy. As Forbes reported, more than half of U.S. customers use digital wallets more often than traditional payment methods.⁸

Outside of digital wallets, B2B virtual card payments are also becoming more prevalent, allowing for a much faster and more convenient experience than traditional bank transfers. Some customers, for example, may not have easy access to a bank. Using a virtual card can help them immediately receive funds, so they can start using their payments to making online purchase and pay bills.

Wider reach

Businesses can tap into a global workforce and fuel international expansion by working with a digital, real-time payments provider. Large enterprise or marketplaces looking to expand, for instance, could scale to new geographies without necessarily opening a local office or having to move funds cross-border. By offering a range of local payment options, they can reach new payees with their preferred payment methods and potentially avoid incurring conversion fees or other cross-border charges.

The right payments solution will also help businesses maintain compliance and navigate complex regulations, especially for global customers. For example, depending on where they do business, companies should be able to adhere to compliance standards such as the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA).

Enhanced security

Certain digital payment solutions can help businesses verify and authorize payouts more efficiently with real-time monitoring and fraud management. As McKinsey reports, many companies are using a combination of solutions to detect fraud while minimizing customer inconvenience.⁷

Global reach requires a global payout solution

It’s tough to manage global expansion on your own. While you’re launching new products and building relationships with gig workers, freelancers and consultants, you don’t want to be concerned about covering crippling conversion fees or violating nuanced payment restrictions. That’s why collaborating with a payment processor is so important.

The right global payout solutions will provide the tools to help you:

• Navigate international payments. Understand the differences in international payment methods, as each may be subject to its own fees and regulations.
• Offer localized payout options. Meet payees across the globe with the payment methods that are most convenient for them.
• Improve efficiency. Save time and money on tedious, manual tasks by automatically automating payout payment processes currency conversions and staying updated with compliance standards.
• Manage and track all payouts on one, centralized platform. Integrate payment processes through one platform, making it easy to keep track of who you've paid and when.
• Save money. Access competitive exchange rates and transparent fee structures so you can streamline costs and always know how your money is being spent.

PayPal’s Hyperwallet real-time payout capabilities

PayPal’s payout capabilities, powered by Hyperwallet, provide businesses with a variety of real-time payout options through one single integration. Whether you’re paying royalties, fares, claims, or commissions, Hyperwallet offers the tools that online marketplaces, gig platforms, and enterprises need to help meet changing expectations in an increasingly digital world.

Spanning more than 200 markets and 50 currencies, Hyperwallet’s end-to-end payment solution helps empower businesses to:

• Provide fast transfers to PayPal and Venmo accounts.
• Provide fast transfers to Bank accounts.
• Deliver payments to debit, credit, and prepaid cards in 150+ countries.
• Help payees access their funds immediately and track payments, providing a more seamless experience.
• Navigate regulations and compliance standards.
• Improve operational efficiencies with automated, mass payout solutions.
• Expand to reach payees across the globe without setting up local payment infrastructure.

The payments landscape will only continue to evolve as businesses and gig economy workers expect fast and convenient access to funds. To stay ahead of the competition, enterprises will need to rethink the way they process payouts and transform their payment experiences. By providing real-time payments, businesses can more effectively improve operations, reduce freelancer churn, and keep payees satisfied.

Learn more about PayPal’s real-time payout solutions, powered by Hyperwallet.