It was an unprecedented year with the onset of the COVID-19 pandemic. Its effects have rippled and affected the safety of the public, but in what other ways has it really affected us? One of the biggest impacts it’s had is on the economy around the world.
“With the global economy on the decline and many businesses reducing hours or even closing altogether, the unemployment rate has skyrocketed,” states Ashish Bahl, founder of KyckGlobal, a cloud-based payments platform company operating out of Atlanta, GA, and Jacksonville, FL. For reference, the unemployment rate in the US went from 3.5% to a shocking 14.8% between February and April 2020. While the unemployment rate has steadily been going down since then, it’s still 91% higher than before the COVID-19 pandemic began, and is predicted to stay that way for the next 3 years.
In Europe, certain government job preservation policies have helped cushion the impact of the pandemic on their unemployment rate, but even these haven’t prevented the numbers from rising. It’s expected that 2.6 million people will be unemployed in Europe by the end of 2021 even if the vaccinations achieve their goal of reducing the amount of COVID-19 related deaths and hospitalizations.
Because of businesses reducing hours and closing, unemployment levels rising, and the loss of traditional revenue opportunities, there has been a significantly rapid shift of people looking toward the gig economy for wages. This shift to people working short-term or zero-hour contract jobs for both primary and secondary income will continue to be a trend, and is predicted to be one of the longest-lasting effects of the pandemic.
Why Does the Growth of the Gig Economy Change the Payment Landscape?
Transitioning into the gig economy obviously changes how a person would be paid for their services, so it’s no surprise that people who work in the gig economy might spend their money differently. Additionally, for businesses, there can be numerous cost and efficiency benefits to paying periodic or one-time payments to temporary workers with alternative payment methods. Gig economy workers tend to be paid directly since their wages do not come from a monthly payroll. This means that their source of income is not likely a bank account.
A Shift to Alternative Payment Methods
For freelancers that offer digital services, a digital wallet might be the best option for receiving payments. With the growth of the “work from home” digital gig economy during the pandemic, many small businesses are looking to outsource many of their business needs. By doing so, they do not have to gather, store, and protect sensitive financial information. Businesses that rely on gig economy workers to provide services outside of the house, such as delivery services, will want to settle their labor costs via digital payment platforms as well.
Fast Secure Payment Methods
If you are looking for alternative payment methods for paying gig economy or contract workers, there are a lot of different options. KyckGlobal provides a diverse array of payment options as well as crucial support processes from one platform. Using KyckGlobal for your payment needs gives you streamlined overhead, happier customers, and improved worker retention.
For more information, visit www.AshishBahl.com