Analysis exposes issues faced by growing marketplaces and those with global freelancers and providers
San Mateo, CA – March 7, 2018 – Freelancing is the future of work and likely the future of business. Tipalti, the leading global payables automation solution, today released a new report finding that a world-class payables operation is essential to establishing a loyal, growth-oriented, and valuable freelancer network. The “Global Marketplace and Gig Economy Payment Satisfaction” report is a result of a survey of over 200 gig economy freelancers from various industries around the world, and focused on their payment concerns, the hurdles they face working with different marketplaces, and how payments impact their loyalty to those marketplaces. Crowdsourcing Week and Shareable.net partnered with Tipalti to help recruit respondents and contribute to the final report. Respondents included freelance workers from Airbnb, Etsy, Fiverr, Contently, iStock, and 99designs, amongst others.
According to the report, poor freelancer payments processing has significant implications on their loyalty to an online marketplace. Half of respondents noted that their payments experience with their current marketplace needs improvement, and over two-thirds of survey respondents (73.7%) said they would leave a marketplace because of payment issues. Payment issues are likely to increase gig economy freelancer churn, which ultimately adds costs to the marketplace’s operation, weakens its reputation, and ultimately damages the quality of the end product provided to customers. Given that nearly half of respondents (48.7%) stated that their marketplace job was their primary source of income, it’s important for marketplaces to address the various factors respondents deemed important to their loyalty, including being automatically notified of an online marketplace payments issue (97.5%), being paid on time (96.6%), and being paid accurately (96.6%). Freelancers also wanted to see payment status (95 percent), and to be notified of payment status changes (85.7 percent).
“Marketplaces have an obligation to their partners,” said Chen Amit, CEO of Tipalti. “Think of where rideshare services would be without their drivers. Marketplaces that cannot attract and retain top freelancers and providers will not thrive over the long term. Freelancers are representatives of the marketplace and often have one-to-one contact with customers. Marketplaces must prioritize their partner satisfaction, and a great payment experience is one of the most effective ways to ensure that.”
Seventy-one percent of respondents indicated that being given a choice of payment methods was important to ensure loyalty. According to the report, nearly half (48.8%) of U.S.-based respondents favored local bank transfer or ACH payments over PayPal (22%), while international payees preferred PayPal (34.1%) and Global ACH / local bank transfers (26.8%). 66.7 percent of non-U.S. respondents said that being paid in local currency was important. 80.5 percent of freelancer respondents indicated they would like to be paid earlier, with those outside of the United States expressing a willingness to provide a greater discount to their online marketplaces in return for that option. These varied payment choices add work for the marketplace but are imperative to retain partners both domestically and globally.
“Marketplaces face many challenges as they look to retain their existing partners while also expanding their network globally,” said Chen. “It’s difficult enough to maintain a marketplace model while growing, but by not addressing payment complexities and regulations, these businesses risk undoing all the good they’re creating. It’s clear that any marketplace with growth aspirations needs to focus on their partner payables experience.”
Click here for the complete report including in-depth analysis of payment preferences, issues, compliance risks, and early payment opportunities. https://tipalti.com/gig-economy-report