Fort Lee, N.J.-based Cross River Bank has formed a partnership with Stripe that will handle every debit push payment within its platform in near real time via Mastercard Send and Visa Direct.
Gig-economy workers want to get paid as fast as possible, and debit push payments have become an important tool for employers to repay workers speedily. Uber can
But not all debit push payments move so smoothly, because many employers’ reimbursements travel to workers' debit card accounts on the rails of the 12 different national debit networks, and the ride isn’t always smooth, according to Cross River Bank founder and CEO Gilles Gade.
“Not every bank is on every debit network, so you might have a merchant in California paying a gig worker in Oregon using a different debit network, which can slow down the transaction settlement time,” Gade said.
Stripe now offers its merchant clients Cross River Bank’s API-based platform as an option to settle direct debit transactions instantly, regardless of where the merchant or payment recipient are, according to Gilles.
For merchants using Stripe, Cross River’s settlement system also has none of the capacity limits of individual debit networks, Gilles said.
“Virtually all traditional payments systems—even the Fed—occasionally go down because they’re relying on legacy platforms and they have load-balancing issues our platforms don’t have,” he said.
The gig economy is driving numerous use cases for faster payments, but relatively few members of the total U.S. workforce are receiving faster payments for their pay, according to Talie Baker, a senior analyst with Aite Group.
“Only about 3 percent of freelance or gig workers received payments via push-to-debit card methods last year, and 1 percent received quick payment via Zelle,” Baker said.
The bank-run Early Warning’s Zelle has ambitions to build its B2C payments this year, which could accelerate competition from many providers.
“If Zelle really gets its act together and focuses on disbursements, I think it could overtake the push-to-debit-card approach,” she said.
