Using Debit Cards for 1099 or Gig Workers | Hydrogen Blog
7 Reasons to Use Debit Cards for 1099 or Gig Worker Payments

7 Reasons to Use Debit Cards for 1099 or Gig Worker Payments

As companies work with more 1099 or gig workers, a common concern is how to provide gig worker payments. Hiring more gig workers over full-time employees can help you save costs on full-time benefits like retirement and health care, but you should keep in mind that many gig workers look for convenient, speedy payments in their short-term jobs or side hustles.

Many gig workers prefer to work in the gig economy rather than in full-time positions, and one of the ways you can retain these workers is by using debit cards to pay wages. At Hydrogen, we offer debit card programs you can implement in your business.

Benefits of Using Debit Cards to Pay Wages 

Technology and new payment options are facilitating growth in the gig economy.

Freelancers can do work from anywhere in the world via the internet and connect directly to customers through apps and platforms. Businesses can utilize technology like Microsoft Teams, Slack, and Zoom to collaborate with their teams digitally. 

Further, technology has allowed companies to offer faster, real-time gig worker cash advances and utilize debit card programs.

1. Speedy, Flexible Payments

More people are turning to gig work due to limited cash flow. Gig work can help individuals build up an emergency fund and meet major financial obligations, such as mortgage or rent payments and utility bills. As a result, gig workers value speedy payments. In fact, many would likely take on more gig work if they received faster payments.

Similarly, many gig workers may consider leaving a job if there are poor payment processing habits and the pacing of payments is slow. Being paid late or not being paid at all are problems gig workers commonly face, so to retain your workers, ensure your payments are fast and timely. 

Many gig workers prefer to get real-time payments and gravitate toward companies without payment delays. A gig worker may associate faster payments with more financial stability and choose one job over another if they’ll get paid instantly without fees.

2. Meeting Gig Workers’ Expectations

The more millennial and Generation Z workers enter the gig economy, the more these digital natives will expect responsive financial services that meet their specific needs. Along with speedy, on-time payments, gig workers expect payment solutions that are easy to use. The best solutions require little setup and enable workers to get started as soon as possible.

Since gig jobs and full-time jobs are viewed and treated differently by workers, there are also different expectations for payment. Traditional payment methods like direct deposits and checks tend to not be the preferred payment methods for gig workers, especially for those without a bank account.

Over the past few years, more companies have started hiring gig workers. Many of these workers are likely to work for only one or two employers to supplement their income, so it’s essential to meet gig workers’ expectations to stand apart from competitors. These workers are looking to maximize their cash flow, and modern debit card issuing can offer better financial outcomes.

3. Easier Reimbursements

Gig workers may also need to make some work-related purchases. Debit cards and prepaid cards can make reimbursements and funds management easier. By allowing gig workers to avoid work-related expenses, you could encourage greater participation. With a workforce spend management solution like debit cards, you can manage funds spent and give workers a better option for paying for costs related to their gig work.

Additionally, debit cards and prepaid cards can help your accountants track and reconcile expenses. Your company can easily keep tabs on your budget and gain real-time insights into how your money is being used. You can also issue money using preset controls with limits on what types of items workers can purchase. Your gig workers will benefit by not needing to use their own personal cards to make work-related purchases and can avoid the need to keep track of physical receipts for reimbursements.

4. No Bank Account Required

At Hydrogen, our debit cards aren’t attached to a bank account. This means users won’t have the ability to borrow funds to make a purchase and your company won’t have to worry about overspending. Additionally, workers without traditional bank accounts can still receive payments via a debit card. Additionally, workers can make purchases at locations that don’t accept cash.

5. Simpler Management of Remote Team

Managing funds and expenses for your remote team is easier with a debit card program. For example, gig workers in sales tend to have a lot of travel-related expenses, such as parking, gas, and meals. Since workers will no longer need to keep track of physical receipts, your accounting staff won’t need to review expense reports or manual receipts. By cutting out these time-consuming processes, you can improve relations with your gig workers.

As you increase the number of gig workers you hire, you can enjoy long-term dividends by addressing pain points and embracing a workforce spend management solution like debit cards. By doing so, you can invest in greater insight and control over how remote gig workers are spending money and build your relationships with the gig workers who can perform the job right.

6. Safe, Reliable Payments

The use of digital wallets and contactless payments are on the rise, and many gig workers have significantly increased their use of these options. Since many gig workers rely on this supplemental income to help cover bills and build emergency funds, reliable payments are crucial. Late payments will interfere with the worker’s ability to pay their bills and may lead them to leave the position. Debit cards offer employers a solution.

7. Custom Rewards

With debit cards from Hydrogen, you can offer your gig workers cash back offers and rewards. You can customize these rewards for your workers and meet your company goals. Rewards can be created based on cash back percentages, merchant names, and spending categories. From our portal, you can develop unlimited rewards programs and offer them to your gig workers.

Sign Up for Hydrogen

At Hydrogen, our innovative platform is used by a wide range of businesses, from large enterprises to startups, to accelerate product development and get valuable products to market quickly. We offer APIs, white-label apps, and components focused on financial products that act as the technical backbone for your team’s product strategy.

Features of our debit cards include quick setup, cost savings, white label design, no-code apps, SOC 2 compliance, and much more. Sign up for Hydrogen today to get debit cards for gig workers.


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