How ‘Real-time’ Is Redefining Our Pay

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In a world where instant gratification is king, these famous lyrics from Freddie Mercury have never rung truer: “I want it all, I want it all, I want it all, and I want it now.”

That’s the challenge facing many businesses today. As demand for real-time payments rises, consumers, businesses, and even employees want their money—and they want it now.

Of course, nobody likes waiting for their hard-earned money, especially when they need to pay a bill or fill up their gas tank. Payroll speed and flexibility is an expectation thanks to significant innovations that allow businesses to leverage fully integrated programs to eliminate the waiting game for employees, bringing more speed, convenience, and control to their pay cycle.

As real-time technology continues to evolve, new opportunities for business leaders to improve how they distribute payroll present pathways to improve the lives of their teams. With that in mind, here are a few key trends that will define payroll in the years ahead.

Real-Time is Driving New Payroll Use Cases

The proliferation of real-time payments creates new use cases for businesses to pay their employees  faster. Off-cycle payments, one-time digital payouts, disbursements to prepaid cards, pushing tips instantly to restaurant staff, and even streamlining termination pay are just a few real-time options large and small enterprises are exploring. These innovations provide greater flexibility to execute payments and are often easy to administer when integrated into a payroll program.

For consumers, payday is no longer a set day. With a payroll program that is not dictated by archaic pay cycles, employees can control when they get paid, including accessing their tips as they are earned. For example, businesses are making payday happen every day by offering earned wage access (EWA) via Money Network^® from Fiserv. With EWA, employees can access 50% of their wages via their Money Network account as they are earned, rather than waiting for a weekly, biweekly, or monthly payday, all at no additional cost to the employee.

Wage access has become increasingly important in today’s competitive job market, as prompt and convenient pay programs correlate strongly to higher employee satisfaction, loyalty, and retention. According to Instant Financial, a Money Network business associate, EWA programs can help drive 30% more job applications, while lowering employee turnover 20% and absenteeism 13%.

The Booming Freelancer Market

Contract and gig work are more common, and freelancers often need access to different programs and delivery options when receiving pay, including instant pay. Real-time payments keep the relationship between businesses and gig workers strong and deliver assurances for both sides; freelancers know they will get paid promptly and businesses know they can issue payments with minimal risk to their larger payroll operations.

Offering instant payments is a differentiator as businesses compete to hire the best workers in a challenging staffing market. Gig workers inherently have choice and flexibility regarding where and when they work. To illustrate, a rideshare company’s ability to pay drivers instantly compared to a competitor with a weekly pay cycle can influence when and where the most sought-after drivers choose to work.

Rewarding and Incentivizing Employees

It is important to reward and incentivize top performers—and do so in a timely manner. Incentives recognize those who rise above the rest and are pivotal to long-term employee retention strategies.

Using real-time payments to instantly distribute incentives to prepaid cards provides flexibility, ease, and choice for recipients. For instance, a bonus for high performance can be distributed to an open-loop prepaid card during a team meeting on a Friday morning, enabling an employee to use those funds for happy hour that afternoon or a ballgame that weekend.

A Gateway to Financial Literacy

Employers have a vested interest in the success and wellbeing of their team members. Employees create and maintain the fabric of a company’s culture and help power business successes.

A well thought out payroll program gives employers a critical touchpoint to help employees boost their own financial literacy. Employers that provide financial education via their payroll program, such as through educational materials, and supplement that information with the tools needed to better manage money, such as real-time alerts, can help their staff to gain more control over their financial lives.

Money Network at APA Congress

Each year our Money Network team joins the best and brightest our industry has to offer at APA Congress. This May, we are looking forward to displaying how we are reimagining payroll delivery, disbursements, and rewards and incentives, while also optimizing payroll cost structures for businesses.

Nigel Andre is Senior Vice President of Money Network from Fiserv.