Getting gig economy workers to send their paychecks directly to a PayPal (NASDAQ:PYPL) or Venmo wallet is one of the goals of a new partnership between PayPal and Fiserv (NASDAQ: FISV) announced Wednesday.
As digital wallets become more popular, the deal between the two fintech companies is focused on giving consumers faster access to payouts and businesses new marketing opportunities on the Venmo platform.
"The use cases that this can support are a 1099 (independent contractor) payment for a gig economy worker, a claim payment for an insurance company, a tax refund from the federal government and more." one Fiserv official told the media "It’s a combination of convenience and real-time payment experience combined together for the consumer."
Lyft (NASDAQ:LYFT), State Farm and FanDuel are current Fiserv customers that have access to the technology immediately, and the company says it is in active discussions to enable payments directly to Paypal and Venmo. In May, Fiserv and State Farm announced a partnership that allows direct transfer of insurance claim payouts to customer bank accounts.
Currently 94% of employees have their check sent directly to a bank account through direct deposit according to American Payroll Association. In the first quarter of 2021, nearly $5 trillion was deposited into non-interest-bearing accounts like a checking account, according to the FDIC.
Shares in PayPal gained 42 cents to $271.52, while those for FISV inched up 23 cents to $113.16.
