Visa, Postmates to deliver instant payouts to delivery drivers
Visa is working with the on-demand delivery network Postmates to deliver real time payments through Stripe’s Instant Payouts feature, running on its push payment platform, Visa Direct.
The partnership will enable the Postmates' fleet of more than 200,000 delivery drivers to gain immediate access to their earnings using the Stripe Instant Payouts feature called “Instant Deposits” instead of waiting four to seven business days to get paid. The agreement is limited to drivers, who are also known as “postmates,” that are Visa cardholders.
Mastercard, which has a competitive push payment offering called Send, was not part of the announcement. Mastercard Send is used by organizations such as the American Red Cross and Allstate Insurance to deliver funds during disaster recovery efforts, such as those following Hurricane Florence; as well as to deliver real time earnings to Uber drivers.
“As we see the on-demand economy gain momentum, Visa Direct’s real-time funds disbursement capability allows funds to be available to individuals in minutes – including nights, weekends, and holidays – providing flexibility and choice for workers to access their earnings,” stated Cecilia Frew, senior vice president and head of North America push payments at Visa, in a Wednesday press release.
The collaboration with Postmates marks an increasing number of companies who are leveraging the card networks’ debit rails for faster payments that covers everything from Ingo Money using it to enable insurance claim payments to paying out Lyft drivers at the end of a shift or ride. Even Square has entered the business, using the card networks’ rails to power its Square Cash App that already pays out 30% of its Caviar food delivery drivers after completing a delivery.
Postmates has relied on Stripe Connect since its launch in 2011 to handle all aspects of its payments business. While an increasing number of companies who use independent contractors are moving toward using instant payout features to pay their gig economy workers, it isn’t without its share of challenges. Most recently, Uber found itself unable to pay out its drivers in September when it encountered a glitch in the system, demonstrating how fragile the promise of faster payments can be.