Faster payments drive higher debit card use for gig workers, small-biz owners

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Debit push payments proved an essential component of the ride-sharing boom, with many drivers opting to pay a fee for immediate funds throughout the day to cover fuel and other expenses. And the technology is finding fans in other niches as well.

These include micro-merchants and consumer P2P payments, and this activity is driving higher overall debit card use in these channels, according to new data from Mastercard.

"ACH payments still take up to two days or longer if the payment occurs over the weekend, and in a lot of use cases where recipients need funds immediately, debit push payments are gaining popularity," said Shari Krikorian, senior vice president of push payments at Mastercard.

In addition to Uber driver payments, the debit push service Mastercard Send also powers real-time delivery of Google Pay's P2P service and rapid merchant settlement to micro-enterprises like food trucks and street vendors.

Data from a Mastercard study suggests that Uber drivers who activated Uber Instant Pay, the white-label version of its debit push payments service, increased both the transaction volume and spending on their debit cards by 20% over a four-month period, compared to a control group not using the feature.

Small-business customers who used rapid merchant settlement to receive funds immediately from merchandise sales used their cards 16% more times and spent 46% more over the next four months, compared with a control group that didn't activate the settlement feature, according to Mastercard.

First-time users of the Google Pay P2P service used their debit card more often — an uptick of 6.5% — over the following four months, compared with a control debit card group that didn't use the feature, Mastercard said.

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Gig economy Debit cards Faster payments Mastercard