The Shift in Portfolio Income: How Smartphones Are Transforming Gig Work in Emerging Economies

In emerging economies worldwide, the model of "portfolio income" has undergone a significant transformation. Once a mere survival strategy for many, gig work has evolved into a structural feature of labor markets, contributing up to 12.5% of the global workforce. However, this shift has also unveiled a critical flaw in traditional financial systems: millions of gig workers remain underbanked. A striking statistic from PayJoy highlights this issue—45% of its customers don’t possess even a basic bank account or debit/credit card.

The Smartphone: Essential Capital Equipment

In today’s fast-paced gig economy, a smartphone has become more than just a tool for communication; it serves as vital capital equipment. For gig workers, it’s not a luxury but an essential asset that functions as a workspace, a marketplace, and a payment terminal all rolled into one. Data from PayJoy’s 2025 Impact Report reveals the depth of reliance:

• 86% of customers claim their financed smartphone is crucial for their current job or business.
• 91% depend on mobile connectivity to work outside their homes, showcasing the flexibility needed to juggle multiple income streams.
• 52% experience a direct increase in income after gaining access to a functional smartphone.

This transformation indicates that the gig economy heavily leans on mobile technology, presenting unique opportunities and challenges for workers who find themselves operating in this landscape.

Rethinking Lending Models

Traditional lending systems often overlook gig workers, mainly due to their unpredictable cash flows and limited credit histories. However, the emergence of device-secured credit is beginning to close this gap. Instead of being treated as one-time loans, these financial products act as buffers against income volatility.

Research from UC Berkeley indicates that access to device-backed credit could equate to an average income increase of 6% per household. In economies where many families live paycheck to paycheck, this boost can have substantial implications. Notably, 87% of users report feeling more financially secure upon accessing these innovative financial solutions.

Introducing the "Graduation Effect"

The long-term potential for financial technology companies and retailers lies in what PayJoy dubs the “graduation effect.” By utilizing a smartphone not just as a productivity tool but also as collateral, gig workers begin to cultivate a digital repayment history. Each timely payment enhances their likelihood of qualifying for more sophisticated financial products.

Studies suggest that access to credit can reduce the risk of extreme poverty by 25% and significantly boost household spending on education. This is particularly crucial in markets like Mexico, where just 42% of adults can cover their monthly expenses solely with their income. The flexibility offered by device-backed credit can pave the way for higher-value purchases, empowering individuals to break the cycle of poverty.

The Hidden Infrastructure of Connectivity

As the gig economy continues its relentless expansion, the so-called "hidden infrastructure" of connectivity and inclusive credit is poised to play an increasingly vital role in shaping competitive advantages in emerging markets. Transitioning from predatory debt frameworks towards transparent, fixed-cost financing—characterized by products without late fees or compounding interest—can transform financial instability into a scalable and sustainable business model.

Fintechs are tasked with rewriting the traditional playbook. By providing innovative solutions that consider the unique challenges faced by gig workers, these companies not only open avenues for economic elevation but also foster an inclusive financial ecosystem.

This exploration of how smartphones are fundamentally changing gig work illuminates the intersection of technology, finance, and social mobility. As emerging economies continue to adapt to the dynamics of a globalized labor market, understanding the role of technology—particularly smartphones—will be crucial in navigating the future of work and financial inclusion.