Fiserv Announces Acquisition of Payfare

Payment and financial services company Fiserv recently announced it has completed its acquisition of Payfare, Inc. Fiserv’s acquisition of Payfare marks a strategic move that strengthens its position in real-time payments and financial services for the gig economy.

By acquiring Payfare, a leading fintech company specializing in instant payout solutions for gig workers, Fiserv enhances its capabilities in the rapidly growing on-demand workforce sector. This acquisition holds significant importance for multiple reasons, including expanding financial inclusion, improving payment processing speed, and strengthening Fiserv’s competitive edge in digital banking.

“Payfare’s offerings, combined with Fiserv’s strengths in processing, bank ledgers and integrated value-added services, provide a complete solution for embedded banking, payments and lending,” Fiserv wrote in a press release.

Incorporating the Gig Economy

Fiserv is already a leader in payment processing, financial technology, and digital banking solutions. However, with the rise of the gig economy—where workers expect instant access to earnings—traditional payroll systems have become outdated.

Payfare’s instant payout solutions enable gig workers to receive their earnings immediately after completing a job, instead of waiting for weekly or biweekly pay cycles. This aligns with Fiserv’s focus on real-time payments, particularly through platforms like Carat and Zelle, ensuring faster and more flexible financial transactions.

The integration of Payfare’s technology into Fiserv’s existing ecosystem enhances digital banking capabilities, allowing businesses to offer on-demand payments to independent contractors and freelancers.

The gig economy is rapidly expanding, with millions of workers relying on platforms like Uber, DoorDash, and Instacart for income. Many of these workers lack traditional banking access or face delays in receiving payments. This is especially challenging for workers who often lack financial stability.

Research indicates that between 70% and 80% of gig workers have $1,000 or less in savings, with over 40% having no savings at all. Additionally, 76% experienced financial hardships exceeding $1,000, with 79% reporting that these hardships impeded their ability to work.

Payfare provides financial services tailored for gig workers, including instant payouts, mobile banking, and debit card solutions. By acquiring Payfare, Fiserv taps into this underbanked population, providing them with faster and more accessible financial tools.

This acquisition aligns with financial inclusion efforts, ensuring that gig workers—who often rely on payday advances and high-interest loans—can access earnings immediately without added fees. ​

The gig economy has experienced significant growth in recent years, with estimates suggesting that between 25% and 35% of the U.S. workforce participates in non-standard or gig work, either as a primary or supplementary source of income. As of 2024, this translates to at least 41 million gig workers in the United States.

Strengthening Fiserv’s Competitive Position in Fintech

The financial technology space is evolving rapidly, with companies like Square, Stripe, and PayPal expanding their reach into instant payments and digital banking. To maintain market leadership, Fiserv needs to enhance its digital payment offerings—and acquiring Payfare is a step in that direction.

Competitor fintech companies are investing heavily in real-time payments and financial inclusion. Fiserv’s acquisition ensures it remains ahead of industry trends. Payfare’s existing partnerships with Uber, Lyft, and DoorDash strengthen Fiserv’s ability to expand embedded finance solutions within major gig economy platforms.

Beyond benefiting gig workers, the acquisition provides value to merchants, platforms, and financial institutions that rely on Fiserv’s payment infrastructure. Enterprises using Fiserv’s technology can now integrate instant payout solutions into their financial systems.

As of 2023, approximately 14.2% of U.S. households—equivalent to about 19 million households—are considered underbanked, meaning that they have a checking or savings account but also use nonbank financial services like payday loans or check-cashing services.

This offers businesses greater flexibility in managing contractor payments, payroll solutions, and vendor disbursements. Banks and fintech partners using Fiserv’s services can leverage Payfare’s real-time payment technology to improve customer experiences and reduce reliance on traditional payroll structures.

What This Means for SAPinsiders

Acquisition expands access to banking and financial services, particularly for gig workers. Fiserv’s acquisition of Payfare is a game-changer in the financial technology sector. It not only strengthens Fiserv’s capabilities in real-time payments, but also expands financial access for gig workers who rely on instant earnings. With digital wallets and contactless payments gaining traction, integrating Payfare into Fiserv’s platform helps drive greater adoption of instant payment solutions. According to surveys by the Federal Reserve Financial Services, 86% of businesses reported using faster or instant payments in 2023. This indicates a significant shift towards real-time payment methods in the corporate sector.

Expanding access strengthens the overall economy and Fiserv’s position. With Payfare’s advanced fintech solutions integrated into Fiserv’s digital banking ecosystem, both companies can drive faster, more inclusive, and more efficient payment solutions across the gig economy and beyond. Fiserv serves 42% of U.S. banks and 31% of credit unions with its core platforms, making it the largest provider in this segment. This figure is likely to expand through the acquisition.

Instant payments play a crucial role in attracting and retaining talent. With nearly 67% of Americans living paycheck to paycheck, companies that offer on-demand pay services like those from Payfare are likely to make a company more attractive compared to those that do not. More than 80% of workers reported wanting to have an expedited pay schedule, and providing solutions like this has shown to be effective in bolstering user satisfaction. Organizations like Fiserv constantly seek out solutions such as Payfare that drive satisfaction for customers and their users, which can help increase usage and overall market share.