Open any social media application and you are all but guaranteed to come in contact with content creators hoping to make a living off the burgeoning digital economy.
Called the creator economy, it refers to individuals producing content such as videos, blogs, podcasts or digital art, and monetizing it through social media and other channels directly to viewers. The relatively new and fast-growing model relies heavily on payments technology.
Goldman Sachs pegged the industry's total addressable market at $250 billion last year, and expects it to nearly double to $480 billion by 2027.
Some of the most popular platforms for creators have also been growing: Amazon-owned streaming service Twitch logged 6.91 million active streamers in October 2024, up from 3.75 million in February 2020, according to Statistia. And YouTube had over 3 million channels in its YouTube Partner Program and has paid out more than $70 billion to creators, media companies and music partners over the last three years, said Thomas Kim, director of product management and creator monetization at YouTube in an
That growth has attracted the
"Creators are small businesses, and they've always been small businesses. But they've been treated like individuals," said Darren Parslow, Visa's global head of commercial solutions.
"They're the equivalent of the micro business or the nano business of years ago, and they're going to be the next generation of our small-business owners, and frankly, our middle market owners and business owners and executives."
Visa last month said it was putting a greater focus on creators, contending financial institutions are not adequately serving the market.
"Creators have a pretty unique set of needs in so much as other gig-economy or digital players also have," Parslow said. Namely, creators and gig economy workers may be able to monetize an asset, but slow payouts from the platforms hamper cash flow.
"Whether that platform is an online platform or a gig economy platform, these small-business owners live and die by cash flow, and so having that cash flow smoothed out by more routine and foundational payments is pretty important," Parslow said.
Content creators also have to deal with other headwinds in payments, such as gathering enough information to make their own payments and handling with charge-backs, said Elias Ghanem, global head of Capgemini Research Institute for Financial Services, pointing to charge-backs on donations to video games streamers as an example.
"Gaming is like gambling or even pornography," Ghanem said. "[People] can go crazy spending on it, but once you see your statement, you can go into denial and challenge [the payment]. Because it's a service that is being disputed, it becomes a challenge [for the creator] to fight it."
Payments companies such as Visa, PayPal, Stripe and Adyen are all looking to solve these challenges to attract the creator economy, Ghanem said.
Visa is looking to marry outgoing and incoming payments strategies for the creator economy, and sees payoffs as a key use case for its real-time payments solution, Visa Direct, Parslow said. "That could be payouts for digital payouts and creators, it could be payouts for insurance payments, it can be payouts for early wage access.
"We're working with multiple platforms around the world and we welcome all platforms to join us in this journey," he said, but declined to comment on which platforms Visa was working with.
Visa has also rolled out other offerings over the last year targeting the creator economy. The company has a social video series called GET P@ID that pairs creators with fashion and music and food creators for a multiweek, mentor-mentee relationship to help build businesses and careers.
The payment processing giant launched its inaugural
Eventually, Visa hopes to sell its commercial small-business platforms, including those around digital money movement and digital money management, to creators.
Content creators may be plentiful, but only 4% of them earn more than $100,000 in revenue annually, according to Goldman Sachs. But the ceiling for creator earnings is high. Mr.Beast, YouTube's most popular creator with 337 million subscribers, said in a Feb. 2024
Visa's focus on the creator economy helps to firm up the business case for an industry that has largely been seen as purely entertainment, said Adam Eckels, owner and founder of AJ Consultants. "Whenever a company like Visa or Mastercard gets into an area like this and says, 'We see this as an area of importance moving forward and we want to be in this line of business,' it certainly legitimizes it."
Payment companies will want to find ways to service — and monetize — the creator economy in the future, he said.
"This content touches education, but it also touches entertainment. It's everywhere," Eckels said. "If people are going to make money off of [content], they need payment avenues."
The creator economy has also caught the attention of payment fintechs that support decentralized, or blockchain-powered finance, such as Destream.
The Cyprus-based Destream got its start by serving clients that had difficulty finding banks and financial institutions that would not process donations given to content creators because the source of funds was unclear.
That presented know-your-customer and
Destream acts as an intermediary between the content creators and the banks. The company handles charge-backs and payment compliance requirements for the creator.
The company's main product is a special payment link or QR code that creators embed into their live video streams or their video recordings. Payers are able to make payments from a card, Apple Pay or with cryptocurrency.
Once received, funds can be transferred to a bank account or into a Destream debit card.
"We just tell the creators that the only job they have to do is create new content," Igityan said.
Destream focuses on small creators, has more than 90,000 registered users and processes more than 10,000 transactions a day. It generates revenue by taking about 7.77% of each transaction between donors and creators, and also charges a fee for wire transfers to bank accounts. Card revenue is generated through a monthly maintenance fee instead of shared interchange revenue.
Other fintechs have also gotten into the space, Igityan said. Streamlabs, which was acquired by Logitech in 2019, and the Softbank-backed StreamElements are also active.
The creator economy could potentially be a "very big deal" for payment companies in the near future, especially considering the low barrier to entry, AJ Consulting's Eckels said.
"There's a lot of creators out there, and there's a lot of people that believe they want to be creators," he said. "Some of the top creators are essentially kids, right? Or at least started what they were doing when they were kids."
The speed in which those payments flow will be key in securing creators' business, he said.
"I think down the road, it's going to come down to — yes, the big players that can get this done safely — but also, who can get it done in a timely fashion."
