EXCLUSIVE: “A Tough Gig” – Dave Glaser, Dwolla and Jay Millard, Ualett in ‘The Fintech Magazine’

The fast-changing nature of work in the US is demanding new, real-time financial solutions that reflect a much more unpredictable income. Dwolla and Ualett are working together to provide one alternative, using A2A rails

Irregular earnings, the struggle of living pay cheque to pay cheque, and difficulty accessing credit are just some of the harsh realities facing freelancers and gig workers on a weekly, if not daily, basis in the US.

While more than a third of Americans freelance (recent estimates suggest between 59 million and 64 million people), this section of the workforce remains underserved by financial products that are stuck in the past when it comes to dealing with different work patterns and sources of income. Financial exclusion for freelancers and the self-employed is a reality.

And it’s only likely to get worse as the gig economy grows, with one report forecasting that nearly half of American workers, some 87 million people, will be freelancing by 2027. It might not be the sole source of income for many, but for those who do rely on it, the unpredictable nature of a freelance cash flow makes instant access to funds even more important.

Denying it to these workers also highlights a major inequality between communities in the US. According to a Pew Research Center report, 30 per cent of Hispanic adults and 20 per cent of Black adults have worked on a digital labour platform, compared to only 12 per cent of White adults. Levelling up needs a new financial fix. The good news is that both infrastructure and payment providers now have the ability to address it by working together.

Take Ualett, a Delaware-based app that provides accessible, real-time financial tools and cash advances of up to $3,000 to gig workers, freelancers, independent contractors and micro businesses who are often overlooked or cold-shouldered by traditional providers.

Pushing the speed limit

The main way that Ualett’s platform currently supports independent workers is by acting as a digital ‘liquidity box’, enabling them to apply for cash advances quickly and easily by verifying earnings in real time, as and when they need them – something that can be invaluable when you have an irregular income or an erratic cash flow. It doesn’t run credit checks, there’s a flat fee instead of interest, and a remittance schedule – all of which can support a gig worker looking for cash in an emergency. And it does it by verifying income from supported platforms.

A timely solution

Say you’re a rideshare driver and your tyre blows late one busy Friday night. You literally can’t afford to wait three days for your bank to open to ask for credit. You need to get that repaired as soon as possible. In the Ualett app, you could apply for a cash advance and receive a decision within minutes, resolve the issue and get back on the road. In scenarios like this, Ualett is not only providing an immediate solution to a liquidity crunch but it also allows the worker to keep working and continue to earn a living.

Speed is of the essence – both in taking a credit decision, and in moving that money to the worker who needs it

“Through our mobile app, they’re able to keep working and stay productive, thanks to the fast money movement we enable for them,” says Ualett’s Chief Revenue Officer Jay Millard. “You first have to make it easy for the customer to access the advance, but then you need a great partner that connects you to the faster payment rails to get that money into their bank account right away.”

That ‘great partner’ for Ualett is pay-by-bank platform, Dwolla. The Iowa-based white-label payment platform enables businesses to securely move money directly between bank accounts and has been championing account-to-account (A2A) payments throughout its decade and a half in the fintech business. Dwolla’s A2A solution enables its clients to leverage traditional Automated Clearing House (ACH) rails and instant transfers for better efficiency and security, while also giving them real-time visibility into their payment flows. It’s an all-round improvement to the user experience.

Echoing Millard’s comments about the importance of timely solutions, Dwolla CEO Dave Glaser says: “We’re leveraging real-time payments to make sure that the gig workers can access the money in the way and the timeliness that they need – whether it’s to support their families, to make repairs to their automobiles, or just to pay the rent.”

Quick solutions are important because, despite leading the way on digital payment services such as PayPal, Apple Pay and Google Wallet, the US payments system arguably has lagged behind other markets when it comes to real-time account-to-account payments. Traditionally, the US had two ACH operators – the Clearing House, which was privately owned by major banks, and the Federal Reserve’s ACH, known as FedACH. Glaser has previously described both as an early form of open banking.

But the benefits of what we now commonly known as open banking took their time to trickle down to consumers. When Dwolla launched in 2010, it was one of the earliest champions of A2A payments but the market has become more crowded since.

In 2017, the Clearing House launched the Real Time Payments (RTP) network for its member banks. Then in 2023, the Fed launched FedNow, an alternative instant payment infrastructure for US financial institutions. Other major players now on the scene include Visa’s A2A transfer service, Visa Direct – competition which has helped drive the market. Plus, as the standard of the tech, as well as the competition, has got higher, so have customer expectations of having easy, frictionless and quick user experiences. In this regard, Ualett credits the payment rails that Dwolla provides it with ‘under the cover’ as being key to a seamless service for its clients.

“We have tens of thousands of small businesses, sole proprietors, gig workers, independent contractors, and they have bank coverage all across the country. Whether they’re with big or small banks, they just need to receive their advances seamlessly and quickly, but the complexity is behind the scenes,” says Millard. Dwolla’s role in solving that is unsung, but crucial. “If we’re doing our job right, we’re like an umpire in a game – the customer doesn’t know what’s happening. Dwolla helps us keep that under the cover.”

Better together

Beyond cash advances, Ualett works with an ecosystem of partners to give its users access to other related financial services suited to their needs. Last year, it partnered with leading virtual insurance agent Insurify so Ualett users can benefit from personalised automobile quotes from multiple insurance providers, all without leaving the app. This enables them to compare and select insurance policies from top insurers in real time, ensuring they get the best coverage at competitive rates without leaving the Ualett ecosystem.

Such partnerships, including that with Dwolla, should help put Ualett ahead of the competition as real-time payment networks rapidly reshape business models and customer expectations in the US – even if the market is still catching up a bit.

“Faster, immediate payments are allowing us to do things that we could never do before in the US,” explains Dwolla’s Glaser. “Businesses can decide if a slower payment or a really fast payment is important. “They can choose payments based on the cost and the risk associated with those. So innovators of all types get to build according to their payment rails and the way their business works.”

Widening the net

Real-time, A2A payments in the US are still in the foothills of adoptions. There’s a mountain to climb says, Glaser.

“But the more banks that participate in the network of real-time payments and FedNow, the more opportunities for business [like Ualett] to reach more consumers. “We have more than 10,000 financial institutions in the US, so it’s quite a daunting task to get adoption from all banks. But now that FedNow and RTP are live, we see businesses are feeling more comfortable in implementing the solutions.”

This evolution will continue and accelerate, he adds, with more real-time payment methods being added to the networks.

“Things like debit cards, stablecoins, other ways to move money across borders. All of those will be intelligently orchestrated by companies like Dwolla, for the innovators like Ualett, who are trying to give their business customers the best experience they can.”

The other major factor driving change is the sheer amount of data available to those innovating financial services for Gen Z in a way the suited and booted bankers of the Baby Boomers’ generation could never have imagined.

“In addition to the transaction itself, there’s so much more rich data available that enables Ualett to use the information we receive and be able to design better solutions for the different types of gig workers that we have,” says Millard.

The generational divide between this new workforce and the previous – about 15 per cent Gen Z, 45 per cent Millennials, 27 per cent Gen X, and nine per cent Baby Boomers – aligns with the biggest mobile money users. In an era where you can order pretty much anything with a few taps on your smartphone, why wouldn’t they expect the same immediacy when it comes to finance?

“They’re going to continue to expect immediate solutions,” says Millard. “Our job is to provide that solution for a gig worker.”

This article was published in The Fintech Magazine Issue #37, Page 32-34

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