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Micropayments and the rise of the Gig Economy

Written by

George Davis

on

Feb 7, 2024

/

Industry

Micropayments and the rise of the Gig Economy

Written by

George Davis

on

Feb 7, 2024

/

Industry

Micropayments and the rise of the Gig Economy

Written by

George Davis

on

Dec 13, 2023

Micropayments and the rise of the Gig Economy
Micropayments and the rise of the Gig Economy
Micropayments and the rise of the Gig Economy

Gig economy

The global online marketplace where freelancers, contractors and businesses connect for short-term, project-based contracts or “gigs”.

Creator economy

The creator economy - a major component of the gig economy - is changing the face of marketing and advertising. Creators are monetising their dedicated communities through brand deals, subscriptions, ad revenue and affiliate links.

In a world dominated by social media, the rise of the creator economy goes hand in hand, projected to grow to $200 billion by 2026. This brings about the need for ‘micropayments’ - more on this later.

A new era for payments?

This move away from the traditional 9 to 5 jobs for gig workers, brings about a major shift in how people get paid. These workers are no longer waiting for a payslip at the end of the week or month.

Two key changes:

  1. Gig workers can choose how they want to be paid. It can vary for each use case. For example a gig payment may be time-based or project-based. 

  2. Different payment methods can be used. Workers can receive direct bank transfers, peer-to-peer payments or use the integrated payment system of a specific gig platform.

Gig economy

The global online marketplace where freelancers, contractors and businesses connect for short-term, project-based contracts or “gigs”.

Creator economy

The creator economy - a major component of the gig economy - is changing the face of marketing and advertising. Creators are monetising their dedicated communities through brand deals, subscriptions, ad revenue and affiliate links.

In a world dominated by social media, the rise of the creator economy goes hand in hand, projected to grow to $200 billion by 2026. This brings about the need for ‘micropayments’ - more on this later.

A new era for payments?

This move away from the traditional 9 to 5 jobs for gig workers, brings about a major shift in how people get paid. These workers are no longer waiting for a payslip at the end of the week or month.

Two key changes:

  1. Gig workers can choose how they want to be paid. It can vary for each use case. For example a gig payment may be time-based or project-based. 

  2. Different payment methods can be used. Workers can receive direct bank transfers, peer-to-peer payments or use the integrated payment system of a specific gig platform.

Gig economy

The global online marketplace where freelancers, contractors and businesses connect for short-term, project-based contracts or “gigs”.

Creator economy

The creator economy - a major component of the gig economy - is changing the face of marketing and advertising. Creators are monetising their dedicated communities through brand deals, subscriptions, ad revenue and affiliate links.

In a world dominated by social media, the rise of the creator economy goes hand in hand, projected to grow to $200 billion by 2026. This brings about the need for ‘micropayments’ - more on this later.

A new era for payments?

This move away from the traditional 9 to 5 jobs for gig workers, brings about a major shift in how people get paid. These workers are no longer waiting for a payslip at the end of the week or month.

Two key changes:

  1. Gig workers can choose how they want to be paid. It can vary for each use case. For example a gig payment may be time-based or project-based. 

  2. Different payment methods can be used. Workers can receive direct bank transfers, peer-to-peer payments or use the integrated payment system of a specific gig platform.

It’s no longer one size fits all.

So, payment products will need to adapt to fit the needs of workers and gig employers across the globe. Payment options become more flexible, customisable and in real-time.

In turn, micropayments are on the rise globally.

Micropayments allow customers to make small online transactions and processing these transactions can vary:

  • Pay-As-You-Go: Customers can make small card payments for services or virtual items. It invites individuals to make small impulse purchases without any large, lasting commitment. E.g. Customers can buy access to a single article, download an eBook or an in-app game feature.

  • Prepay: Online gift cards or subscription fees are micropayments in action. E.g. Streaming sites that require a subscription fee for unlimited usage in a given timeframe, such as Spotify or Netflix. 

  • Postpay: An alternative to pay-as-you-go, purchases are tracked and aggregated which are later deducted in one larger transaction. E.g. Creators and freelancers are paid out a lump sum once enough micro payments are collected.

Gig economy trends in MENA

We’re predicting the gig economy will continue to expand in MENA. Freelancing is a major market with an associated value of $4 billion in the Middle East. And it's scaling. Young workers entering the labour market are seeking flexible working arrangements over traditional set ups. A recent survey indicated 70% of MENA businesses will look to hire freelancers and 78% of workers intend to focus on part-time, freelance gigs.

Large economies in the region, Saudi, the UAE and Egypt are shown to be well positioned for the emerging gig economy due to their youth-driven populations. For example, freelancers registered in Saudi have grown 157% between 2020 and 2023, accounting for almost 19% of the domestic labour force.  With major internet and smartphone penetration across the region means access to the gig economy is at consumers’ fingertips.

Here are our top three trends to watch:

  1. New gig economy sectors on the rise:
    The region will see a growth in new markets for gig workers beyond ride-sharing and deliveries. It will likely be in-demand, skills-based projects such as virtual assistants, online coaching and home improvements.

  2. Evolving, tailored regulations:
    New ways of working require updates to regulatory frameworks and workers’ rights. We believe this will be revised in the coming years to encompass the gig economy.

  3. Updated ways to pay:
    We see the gig economy being a gateway for the next evolution in payments for the region. With the demand for instant, cross border and micropayments, we see the MENA landscape quickly shifting. This means modernised rails and better technological infrastructure and cross border interconnectivity.

It’s an exciting quantum leap to enable cheaper and faster transactions.

Get in touch with us to unlock payments in MENA with a single integration.

George Davis, Fuse Co-Founder & CEO
George Davis, Fuse Co-Founder & CEO

George Davis

, Co-Founder & CEO

at Fuse

George is a serial entrepreneur and founder of Fuse, based in Dubai, and is a self proclaimed payments nerd.

George Davis

, Co-Founder & CEO

Co-Founder & CEO

at Fuse

Fuse

George is a serial entrepreneur and founder of Fuse, based in Dubai, and is a self proclaimed payments nerd.

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