A recent study conducted by Thunes and Juniper Research highlights the detrimental impact of fragmented cross-border payment systems on gig workers' livelihoods. The survey, which encompassed over 6,700 respondents from ten major markets, found that one-third of remittance recipients struggled to meet essential expenses like food and rent due to funds being trapped in inefficient payment infrastructures. This 'fragmentation deadlock' is exacerbated by the fact that while domestic payment systems have evolved to facilitate real-time transactions, the systems that connect these networks globally have lagged behind, creating a significant barrier for international workers.
The findings are particularly alarming for gig workers, who are disproportionately affected by these payment delays. The study revealed that 11% of gig workers reported losing job opportunities due to payment-related issues, a rate nearly three times higher than their non-gig counterparts. Moreover, 63% of gig workers engage in international money transfers, highlighting their reliance on efficient payment systems. The report also underscores the psychological toll of payment unpredictability, with 42% of respondents experiencing stress or anxiety linked to delayed transactions.
Chloé Mayenobe, deputy chief executive of Thunes, characterized the cross-border 'friction tax' as a significant impediment to economic participation, particularly for those in vulnerable positions. The research aligns with ongoing G20 efforts to lower remittance costs globally, a goal that remains unfulfilled as average costs still exceed the target of 3% set for 2030. While some regions are making strides toward improved interoperability in payment systems, a cohesive global framework is still lacking, leaving many corridors underdeveloped.
For businesses operating in the gig economy, these infrastructure gaps represent not only reputational risks but also a ceiling on potential revenue growth. Companies like Uber and Deliveroo, which rely on timely cross-border payouts to their workforce, may find their operational models challenged as payment delays become more common. The Thunes Cross-border Payments Interoperability Index, which benchmarks various markets on payment efficiency, reveals the urgent need for innovation and investment in payment solutions that can bridge these gaps and enhance the economic prospects of gig workers worldwide.
The findings are particularly alarming for gig workers, who are disproportionately affected by these payment delays. The study revealed that 11% of gig workers reported losing job opportunities due to payment-related issues, a rate nearly three times higher than their non-gig counterparts. Moreover, 63% of gig workers engage in international money transfers, highlighting their reliance on efficient payment systems. The report also underscores the psychological toll of payment unpredictability, with 42% of respondents experiencing stress or anxiety linked to delayed transactions.
Chloé Mayenobe, deputy chief executive of Thunes, characterized the cross-border 'friction tax' as a significant impediment to economic participation, particularly for those in vulnerable positions. The research aligns with ongoing G20 efforts to lower remittance costs globally, a goal that remains unfulfilled as average costs still exceed the target of 3% set for 2030. While some regions are making strides toward improved interoperability in payment systems, a cohesive global framework is still lacking, leaving many corridors underdeveloped.
For businesses operating in the gig economy, these infrastructure gaps represent not only reputational risks but also a ceiling on potential revenue growth. Companies like Uber and Deliveroo, which rely on timely cross-border payouts to their workforce, may find their operational models challenged as payment delays become more common. The Thunes Cross-border Payments Interoperability Index, which benchmarks various markets on payment efficiency, reveals the urgent need for innovation and investment in payment solutions that can bridge these gaps and enhance the economic prospects of gig workers worldwide.
Source: The Fintech Times
