Real-time payment processing is drawing more attention to tangible use cases, such as helping workers pay bills that are due before they receive their salary.

"These are real life issues," said Jason Lee, founder and CEO of DailyPay, a New York-based company that allows workers to access their salary before the regularly scheduled payday. DailyPay just updated its engine to enable instant access to pending salary instead of next-day access. "The ability to get money today versus tomorrow can be the difference between a late fee for a bill or not getting a late fee."

The real-time service is an extension of the one-year-old DailyPay's core product, which integrates with a company's payroll system to enable early disbursements without changes to the payroll process.

Chart: A growing gig economy

DailyPay funds the early withdrawal. For example, an employee who takes $500 of a $1,500 paycheck receives $1,000 on the normal payday. The employer sends the full $1,500 on payday as normal, with $500 going to DailyPay instead of the employee. The employee pays a $1.25 fee for next-day availability and $2.99 for instant availability, figures that are well below payday lending.

"People are able to use Venmo to send money quickly to other people," Lee said. "They ought to be able to get their salary the same way."

DailyPay has about 41,000 users in all 50 states, with service industries such as cleaning, delivery, transportation, maintenance, and home health care. Fiserv's Digital Disbursements is powering DailyPay's new instant feature, linking to DailyPay via an application programming interface to enable payments via account transfer, debit cards, social tokens, email addresses and paper checks.

"This is a great example of how faster payments can work," said Tammy Shapiro, a vice president at Fiserv. "There's an expectation among consumers that they're going to be able to move money around faster. And instant pay also opens the door to new business models."

The emerging business models of the "gig economy" have changed workers' relationships to their companies, with more daily and even hourly work generating a demand for freelance-style payments.

That's drawing a more attention to payroll. Some companies, such as CloudPay, are integrating payroll with other human resources systems. Other companies such as contractor payment provider Tipalti are raising money to expand their capabilities. And Uber, the company most often associated with the gig economy, offers its drivers the option to get paid instantly.

As the gig economy grows, workers will demand more immediate payments and companies will want to meet this demand to improve worker retention, according to Michael Moeser, director of payments for Javelin Strategy & Research. While faster payments will remake the gig economy payroll, similar changes are possible hourly and even salaried employees, said Moeser.

"The notion of someone getting paid every two weeks or twice a month dates to a time before television, cell phones and Amazon," Moeser said. "There are more consumers everyday struggling to pay bills and falling into the trap of visiting check cashers and payday lenders."

The economy will see more startups serving a pay-on-work-completed demand from workers until companies recognize the payroll needs of staff, Moeser said. "The evidence that companies are beginning to work with these startups is a demonstration that they are recognizing that pay schedules will likely need to change in the future."

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