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Digital Payout Systems: The seamless, instant transactions we’ve all been waiting for

Contactless customer payment methods are on a massive upswing.

As early as April of 2020, at the very beginning of the pandemic, Mastercard reported that 52% of people under 35 had already made a switch to contactless tap-to-pay credit cards.

Strikingly, Visa already acknowledges that plastic cards will soon become obsolete. They have put a focus on methods such as cloud accounts, QR codes, P2P transfers, and blockchain transactions as part of their move toward facilitating seamless and instant payments.

With the promotion of featured highlights such as their “Innovations for the Cashless World Report,” it’s clear where Visa believes the world of financial transactions is heading at breakneck speed. 

So, what does this impending global change mean for business owners and their employees just trying to stay on top of the wave of new technology?

It means adaptation on a number of levels.

Accounting departments everywhere should brace for impact.

Ask the average owner or manager of a mid-sized company with a handful of locations how many labor hours are spent every year on keeping track of items like employee hours, wages, tips, promotions or position changes, payments, and tax and healthcare obligations, and you’d likely hear a number well into the thousands. 

Add to this figure the amount of time it takes to track down and fix the inevitable errors that occur when all of these calculations are done manually, with spreadsheets, calculators, and human elbow grease, and you’re looking at a huge investment of time and effort.

In fact, one client-reported survey by Gratuity Solutions found that a staggering 3100 – 7650 hours are spent every year, for every location, on performing these tasks.

Now consider how those accounting tasks will be affected by:

  • Policy changes
  • Training new hires
  • Minimum wage hikes
  • Changes in tip distribution legislation
  • Reopening after COVID, or
  • Adopting stricter health and safety protocols, which could affect job duties and hours for every employee

Clearly, crunching those numbers is about to become even more of a headache than usual. 

How can companies adapt quickly and stay on top of the changing ways of doing business? Thankfully, the greatest innovations come from the most challenging of circumstances.

Automation is the light at the end of the tunnel. 

When all of the above processes are automated, those hours wasted turn into hours saved. Time saved equals money saved, not to mention the opportunity to spend that time on useful projects that improve the customer experience. 

Employees can benefit from digital payouts as greatly as customers and business owners do. The key is to choose a digital payout system that incorporates daily pay.

Image Credits: Unsplash

Just because customer transactions and employee payments happen at opposite ends of the cash flow process doesn’t mean they’re entirely separated from one another. 

As customers reach for contactless chip credit cards or payment apps to pay their restaurant bills and send tips, they forego the tradition of leaving cash on the table to thank their server for a job well done. It might not seem like a big deal for those accustomed to a biweekly direct deposit schedule, but it can make quite a difference for tipped workers. As a result of digital tipping, servers who once relied on a daily influx of cash now must wait two weeks for those tips to be disbursed along with their regularly scheduled paychecks.

While tipped workers might feel the brunt of the switch to digital transactions, workers in all industries can benefit from the solution to this problem: daily pay.

Imagine how helpful it would be for workers across the country to take home their earnings every single day, just by logging into a convenient app and instantly loading a pay card.

Daily pay makes financial planning simpler, helps workers avoid bank overdraft fees and expensive payday loans, and puts dinner on the table every single night for families in need. Considering almost 78% of Americans were living paycheck to paycheck even before the pandemic, the need for a better payment solution is more dire now than it ever has been.

Access to daily earnings, from the end of the very first shift, could be the crucial make-or-break factor for many people struggling to make ends meet after COVID closures and long periods of unemployment.

As recently as thirty years ago, could anyone have predicted a world where employees could choose how they want to be paid?

Just think of all of the ways technology has enabled workers to receive their hard-earned wages:

  • Digital Wallets: How many millions of people now have digital wallets? How many digital wallet options are there? From mobile banking apps that allow users to skip visiting local branches in person to services that handle transactions with the single click of a button, modern Americans have nearly limitless ways to pay and be paid. 
  • Pay Cards: Keep your pay right where you want it: safely in your wallet, where it belongs. Load a pay card instantly after every shift, and head home with money in your pocket. 
  • Visa Direct: Transfer funds to a bank account you already own via your regular Visa credit or debit card, with no need to sign up for any new services.

No matter a person’s background, economic status, or employment status, every American has the tools available to take advantage of at least one of these options, or any of the dozens of new options in development that will eventually render today’s bleeding-edge tech obsolete. 

The best part about developing technology is the nearly endless potential. Everything is possible.

Every single day, Gratuity Solutions’ clients such as Bob Evans, Brinker International, and HMS Host pay out millions of dollars to thousands of employees using the automated platform. This is a process that would have taken countless hours before the advent of automated digital payout systems.

As the technology grows and develops, it’s clear that those companies that adopt newer, more seamless, and more conscientious ways of paying employees will prosper above and beyond their competition. 

When you combine saving costs with automation, empowering employees to reach financial stability, simplifying compliance and record-keeping, and enticing happy employees to stay on board because of the excellent daily pay advantage, the competitive edge gained by taking this leap is undeniable.

That edge only grows sharper for companies who take advantage of the treasure hoard of information at their fingertips. 

Because Gratuity Solutions partners with more than 35 POS companies and 50 payroll services, we have access to a massive data set that has become invaluable to third-party providers. For instance, our proprietary software formed the backbone of ADP’s digital ecosystem that connects the business cycle end to end – from customer transactions to employee payouts and everything in between. 

We do this by harvesting data from each partner system, normalizing those data so they can be universally read by other systems, and then sending the results to our partners and clients to use in their businesses. We like to think of this PayDataSync platform as one central solution that ensures that each digital tool a client uses works together seamlessly with the others and returns valuable metrics back to that client and each partner. 

Going digital isn’t just for large businesses. Even pioneers in the gig economy have options for seamless digital payouts.

Perhaps one small silver lining in the wake of the COVID pandemic is the fact that many Americans, faced with the prospect of losing their traditional jobs, have dug deep and adapted, revolutionizing their approaches or even starting new businesses of their own. 

Many hair stylists now go door-to-door offering safe, one-on-one services instead of having many customers pile into a central shop. Citizens who live in food deserts have started planting fruits and vegetables in community gardens and selling low-cost produce to their neighbors in need. Parents working from home without daycare for their children often pick up freelance work to make ends meet and keep their schedules flexible. 

What use do these people have for antiquated payment methods? When the very nature of these businesses is to adapt to changing needs – staying safe from the pandemic, providing necessities to people who may not be as fortunate, or working remotely without access to a traditional credit card reader or cash drawer – it is equally important for payment methods to adapt along with each business. 

With the tap of a button on a smartphone, the intrepid hair stylist receives her payment, complete with tip, directly into the digital wallet of her choice. Through the magic of digital payouts, each Samaritan working their local farmer’s market can have the day’s pay instantly loaded onto a pay card, so they can stock up on their own healthy produce before heading home after each shift. And the working parent could opt to contract with companies using Visa Direct, which allows secure direct deposits into their already existing bank accounts. 

There’s no longer any reason to carry and handle cash, count tips manually, or wait two weeks for payday. 

Will cash make a comeback someday?

Image Credits: Unsplash

It’s possible that, once the COVID crisis subsides, cash transactions may surge again without the fear of germ contamination pushing customers toward digital alternatives. However, the trend toward digital payouts and away from cash began before the pandemic, as PYMNTS.com noted in their 2019 “deep dive” into the digital tipping revolution. 

From 2020 – 2025, Business Wire forecasts a 23.8% growth in mobile payments alone. They credit this rise to the “proliferation of smartphones” rather than a drive toward health and safety as a result of COVID. Hence, even if COVID disappears tomorrow, the digital payouts trend is already firmly entrenched.

Considering the vast number of digital options consumers already have access to, and the continuing expansion of those options, it’s easy to draw the conclusion that more and more people will reach for a digital device rather than a physical wallet to complete a purchase. 

If you own a business, heed the writing on the wall. Like it or not, the future is digital.

Whether you pride yourself on riding the bleeding edge of technological developments or you’re more the type that thinks words like “automation” and “future-proofing” have a vaguely unnerving, science-fiction ring to them, your company faces the same challenges and competition as anyone else’s in your industry. 

One thing everyone can unite behind is the idea that, when it comes to achieving and maintaining success, it’s better to lead the pack than to miss the wave and find yourself struggling to keep up. 

The technology exists to bring your business into the future today, and you can be up and running in just a few minutes.

With an automated digital payouts platform such as the one offered by Gratuity Solutions, you can…

  • Instantly calculate wages, tips, service charges, commissions, and bonuses for your whole roster of employees at once,
  • Pay employees daily and allow them to maintain the financial freedom that same-day digital pay provides,
  • Establish financial transparency with your employees through a simple and intuitive app,
  • Maintain automatic compliance with tax and healthcare obligations,
  • Keep detailed digital records,
  • Integrate this solution seamlessly with your existing POS and payroll systems or upgrade to one of our recommended partners, and
  • Stay on top of the trend toward digital payouts without spending countless hours in front of a spreadsheet.

After a brief installation process, you can check modernizing and future-proofing your business off the to-do list and get back to doing what you love. 

About Gratuity Solutions

In 2012, Gratuity Solutions pioneered the first cloud-based tip and payment calculation platform of its kind. Today, we are proud to remain the primary thought-leader and foremost provider of automated digital payouts software for the hospitality industry. 

Our tightly knit team, lead by Aleksandar Stepanovich, CTO and founder of Gratuity Solutions, built the company from the ground up. In 2014, we officially brought our product to market, and in 2017 we received a patent. Expansion snowballed from two Florida-based restaurants to fourteen in the Washington, DC area, and then to one hundred and fifty restaurants across the country in less than a year.

Currently, Gratuity Solutions provides service to over 12,000 locations, including quick-service and full-service restaurants, bars, night clubs, and hotels, as well as many hair salons and spas. Headquartered in Naples, Florida with over 25 employees, we continue to work tirelessly to expand and perfect the capabilities of digital payouts software. We are proud to have managed over $2.5 billion in digital payouts to workers across the country. 

Our digital payouts platform eliminates the rounding and errors that happen naturally when humans try to calculate tips and wages, saves businesses thousands of employee hours that would have been spent doing those calculations, and adheres to all tax and healthcare regulations to keep businesses compliant automatically.

Featuring benefits such as same-day pay for employees, custom calculations and POS integrations, and a calculated ROI of 6.5 times the cost, Gratuity Solutions is poised to expand into all businesses and industries nationwide. Our software integrates smoothly with existing POS systems by using constantly evolving APIs that keep us at the forefront of innovation among payday software providers.

Though Gratuity Solutions solves a variety of problems in the hospitality industry with our groundbreaking platform, we remain committed to one central mission: giving businesses access to easy digital disbursements that put accurate, regulation-compliant payments into the hands of the hard-working labor force as quickly as possible.