In this digital age, instant payments (FedNow and RTP) have emerged as a game-changer offering real-time transactions and greater financial control.
Financial Struggles of Americans
Did you know that according to the Federal Reserve study on Economic Well Being published this year, that 37% of Americans live paycheck to paycheck? This staggering statistic highlights the urgent need for innovative solutions like instant payments.
This number also coincides with the number of American’s participating in the gig economy. Coincidence? I’m not so sure. While the gig story is projected as “flexibility and control”, most of these people are relying on gig jobs as a secondary source of income.
Instant Payments for Payroll
All companies should be evaluating how to offer their employees payroll via Instant Payments, to empower their employees with faster access to their hard-earned money.
More imperative than even Flexibility or Convenience
Today’s gig workers rely on real time payments, ensuring that they can quickly receive funds for their valuable services without delays.
When looking to pay a bill before incurring unwanted fees, there is nothing more helpful than having confidence that you have the funds in your account.
Real-Time Decision Making
With real time payments, gig workers can swiftly assess their financial situation, making informed decisions on taking up additional jobs to boost their income.
Benefits of real time payments for those living paycheck to paycheck
Financial Visibility : Instant payments provide the ability for individuals to receive funds in real-time, and thus have transparency and confidence in their bank balance, enabling better budgeting and reducing the risk of overdrawing their account.
Avoiding Fines and Penalties: When an individual is paid the same day as the work done, they are then in a position to promptly settle bills, avoid late payment penalties and maintain a solid financial standing.
Opportunities to make up shortfalls: When these individuals assess their financial situation and see a shortfall, they are then able to control their workflow and take on other gig opportunities to make up the difference
Improved peace of mind: By eliminating financial uncertainties, real time payments offer a sense of security, and peace of mind, reducing stress and fostering financial well-being
Through the power of real time payments, we have the opportunity to redefine financial inclusion and alleviate the challenges faced by those living paycheck to paycheck. By embracing this and integrating instant payments into payroll solutions, we can create a more equitable and accessible financial system for all.
About the Author
Marcia Klingensmith known in the industry as the "Instant Payments Maven" is a FinTech Consultant with a passion for innovation in the payments landscape. With more than 15 years of experience helping financial institutions navigate the ever-evolving world of payments, Marcia is a trusted advisor on instant payments, cross-border transactions, and the future of money. She is committed to promoting conversations that push the boundaries of financial technology and empower businesses to leverage its potential.
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