Jovi Overo, Managing Director at Unlimit, discusses the importance of Embedded Finance for gig economy workers and platforms.
The integration of Embedded Finance into the gig economy is like introducing a high-speed internet connection in an area previously served by dial-up only. It significantly accelerates and enhances transactions, making financial services not just an add-on, but a seamlessly integrated component of the gig economy platform. This evolution enables real-time, on-demand access to financial products directly within the platforms where gig workers find jobs, complete tasks, and manage their earnings.
For gig workers, this means the blurring of lines between earning and using money, especially as financial tools become as readily accessible as the gigs themselves. Platforms can now offer banking, insurance, credit, and payment services embedded within their ecosystems, creating a holistic environment that caters to both the professional and financial well-being of gig workers. This integration fundamentally shifts the gig economy landscape from being job-centric to a more comprehensive, worker-centric model, focusing on the overall empowerment of the gig worker. Our recent collaboration with Native Teams is a case in point.
Gig economy workers reap several benefits from Embedded Finance solutions. Firstly, unlike traditional payment cycles, Embedded Finance enables immediate access to earned income, addressing the critical need for cash flow management among gig workers. Companies such as Hastee Pay, Salary Finance, Native Teams, and Wagestream spring to mind. It also makes the personalisation of financial products possible, allowing workers access to financial services that recognise their unique needs and circumstances, such as tailored insurance products and credit offerings based on work history.
Moreover, by integrating tools for tax calculation, savings, and investment directly within gig platforms, workers can manage their finances more efficiently, reducing the need for multiple external apps or services.
Finally, by handling financial transactions in the gig economy platform, workers can benefit from enhanced security measures and a consolidated view of their financial health. Collectively, these advantages improve the financial resilience and autonomy of gig workers, enabling a more sustainable and satisfying freelance career path.
In my opinion, it helps in several ways. By offering financial services, platforms can increase worker loyalty and satisfaction, making their ecosystem more attractive compared to those of their competitors.
Embedded Finance solutions also help navigate complex financial regulations by partnering with fintech companies that bring regulatory expertise and infrastructure, thus ensuring compliance. On the other hand, they simultaneously allow platforms to tap into new revenue streams through financial services, whether from transaction fees, premium service offerings, or partnerships with financial institutions.
Last but not least, Embedded Finance makes it possible for platforms to gain access to data insights on worker behaviour and needs, which can help them make informed decisions and extend suitable service offerings.
All the advantages outlined above enable gig economy platforms not only to enhance their service offerings but also to position themselves in a competitive market strategically.
Regulatory hurdles, technical integration, partner selection, and data security are only a few of the concerns and barriers that come to mind. Navigating the complex web of financial regulations, integrating financial services into existing platforms without substantial in-house tech capabilities, and addressing privacy concerns are all tasks that can seem daunting and demanding, especially if done without a reliable partner.
Finding the right fintech partners and managing these partnerships effectively is crucial, and it requires due diligence and ongoing collaboration to align services with user needs. This is one of the benefits of working with a regulated payment institution that understands the unique challenges presented to these platforms and that has robust anti-money laundering (AML), compliance, and legal processes. It’s also one of the main reasons why I joined Unlimit.
This editorial piece was first published in The Paypers' Fintech for Marketplaces and Platforms Report 2024 which taps into the fast, ever-expanding ecommerce industry, being the ultimate source of information for businesses looking to expand and grow their consumer base.
With over 20 years of experience in fintech, payments, banking, and Lending-as-a-Service, Jovi is currently the Managing Director for Unlimit’s global BaaS division. Jovi holds a bachelor’s degree in psychology and an MBA from the prestigious Imperial College Business School. In his current role, Jovi is responsible for developing and implementing BaaS solutions for Unlimit.
About Unlimit
Unlimit is a global fintech that offers a portfolio of financial services including payment processing, BaaS, and an on-and-off-ramp fiat solution for crypto, DeFi, and GameFi. With 500 employees across 16 offices and five continents, the company aims to eliminate financial boundaries for global business across Europe, the UK, LATAM, APAC, India, and Africa.
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