22 December 2015
Diversifying payments for modern ways of working
As I move through my day, the payments system is essential in helping me get things done. How do I travel to my office in London? My electronic payment card, Oyster, allows me to tap in and out at stations with minimal effort. I can withdraw cash fairly easily from the ATM network, and I can use my contactless payment card to buy lunch on the run when I’ve got no cash. Whilst I’m busy writing this article at my desk, somewhere far away an automated system is paying my mortgage, utility bills, Council Tax and phone bill by Direct Debit. I have an automated tool on my bank account which sweeps the pennies from each debit card transaction into a savings account. And I can see all my finances at a glance through any one of a range of web- and phone-based tools.
Admittedly, I haven’t yet found the easiest way to avoid bank charges for paying electronically overseas, but seen within the context of my typical day in a salaried job, the payments system allows me to get most things done. Our payments system works effectively, on the whole, for the mainstream amongst our society, for those of us with regular jobs paying a monthly salary, living in stable accommodation, with predictable income and outgoings and little change in our life.
But over the next ten years my “mainstream” life will become increasingly unusual. The employment and housing markets are already shifting away from the kind of permanence I know as normal, towards shorter-term and ever-changing conditions. The employment market has seen a rapid rise in unpredictable work patterns; official figures show that already around 1 in 40 people in employment have a zero hours contract as their main job and this figure is likely to rise.
There are around 4.5 million people registered as self employed, higher than at any point over the past 40 years. And although the rise in total employment since 2008 has been predominantly among the self-employed, the average income from self-employment has fallen by 22% over the same period. The data also shows that self-employment is likely to be both an alternative to long-term unemployment amongst all income ranges and a top-up option for those past the formal retirement age. Consequently there will be an ever growing population who do not have a single job with a monthly salary, and who increasingly rely on irregular and unpredictable
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