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The Vital Role of Payment Systems in the Global Creator Economy

Main image for a BOLD Awards blog on the benefits of automated payments in the creator economy

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The creator economy is a vibrant landscape of independent content creators building careers around their passions. It flourishes on one crucial element: efficient and accessible payment systems. From musicians to podcasters, YouTubers to writers, creators rely on seamless money transfers to thrive amid overall creator economy growth. This role becomes even more critical in an international context, where borders and currencies add complexity. This BOLD Awards blog looks at the role and importance of automated payment systems for creators and the marketers who use them to promote businesses and brands.

Sector background

With the rise of social media in the late 2000s and early 2010s, and the introduction of digital advertising monetization, creators began to make money from their content. As the market grew, revenue streams diversified and creators tapped into new income sources, including sponsored content, merchandise sales, and affiliate marketing. By the 2020s the creator economy had gained mainstream recognition, and major corporations and advertisers came to recognize the value of creative partnerships. The booming Creator Economy was Crowdsourcing Week’s theme for 2023.

Building and maintaining strong relationships with freelance creators is becoming increasingly important for business and brand owners. Successful creators have built relationships with their audiences and followers, and have loyal fanbases of people with the same interests. They bring flexibility, cost-effectiveness, and a wealth of unique perspectives to the business environment that marketers cannot afford to ignore. Marketers can piggyback the credibility and trust that followers already have in their favorite influencers.

The growing number of individuals becoming content creators and innovators is one of the creator economy’s key trends, the landscape is evolving rapidly. According to Goldman Sachs, the creator economy is expected to grow substantially, reaching a staggering $480 billion by 2027. 

Creator priorities

What are the creators looking for? A recent survey conducted by Tipalti, a top automated payment system provider and a BOLD Awards category partner, shows global content creators who earned income creating or producing content have two key priorities. 

The first is an alignment of the values of a business or brand they work with and their own. Almost half agreed that a partnership should feel natural and authentic and that the product or service offered by the brand must resonate with the creator’s content and values. 61% of the creators surveyed indicated that it is essential that they work with brands that they genuinely like or would use themselves. They have to safeguard the credibility and trust of their fanbase.

Photo by Daniele La Rosa Messina on Unsplash

The second factor is compensation. Many creators are concerned that generative AI will undermine their potential income, and 61% of creators indicated fair compensation was their number one most important aspect when choosing which brands to work with. Half of the creators also said unfair compensation was the main reason they felt their creative work was undervalued by a brand or client. 74% indicated this would result in them ending their partnership with a brand.

This is bad news for the businesses that use them, because over time the creators learn more about their clients and deliver more insightful work. It’s not good for marketers to keep starting from square one with new contributors.

However, it’s not only the amount creators get paid. They want to receive payments accurately, on time, and in the way they prefer to be paid. Over half of the creators who were surveyed had experienced late payments from brands or clients for their creative work, which resulted in severe financial strain. In addition, 85% of creators agreed that a negative payment experience made them hesitant to accept more work from a brand, even if the opportunity seemed promising. 

Their preference for correcting this issue is automated payments and 95% of creators agreed that they were more inclined to do repeat work for businesses that had an automated payments solution in place. The peace of mind that payment automation provides gives creators more freedom to focus on what they do best.

How payment systems shape the global creator economy

Enabling monetization

For direct support, fans can directly tip, subscribe, or buy merchandise through integrated payment solutions, allowing creators to monetize their content across platforms. Payment systems with international capabilities like multi-currency support and localized options break down geographic barriers mean those fans can be worldwide. Platforms that offer recurring payment options empower creators to build on-going income streams through memberships and tiered subscription plans.

Empowering creators

Secure and transparent payment systems instill trust in fans, and clearer insights into creators’ earnings gives them better control of their cash flow through timely access to funds. Timely access is crucial for managing finances and for creators to reinvest in their craft. Efficient systems ensure creators aren’t waiting long to receive their hard-earned income, and can also integrate with relevant tax solutions to simplify matters. This is particularly relevant for creators operating across borders and who are subject to complex international tax regulations.

Building the ecosystem

Platforms with robust payment systems attract and retain creators by offering secure, hassle-free ways to get paid. Flexible payment options like micro-transactions and tipping encourage experimentation and engagement, fostering diverse monetization methods. Automated payment systems also ensure inclusivity through accessible and localized payment solutions that empower creators from all backgrounds to participate in the global economy.

Automated payment system providers in the creator economy

Here are some examples of automated payment systems relevant to creators.

Logo of Tipalti, an automated payment systems provider and a BOLD Awards 2024 category partner
We are proud Tipalti is a BOLD Awards 2024 category partner

Tipalti is the only company handling both Global Payments and Accounts Payable workflows for high-velocity companies across the entire financial operations cycle. It is a prominent provider of automated payment systems focused on B2B payments, specifically for managing payments to vendors, freelancers, and partners across the globe. It also offers solutions for creators through integrations with platforms like YouTube. 

The platform’s global reach, multi-currency support, compliance automation, plus complex payment workflows (e.g., tax withholding, VAT compliance), make it ideal for payments to creators with international audiences, complex payout needs, and significant payment volume.

Other platform-specific solutions

Patreon is a monetization platform that provides business tools for content creators to run a subscription service and sell digital products. It enables automated recurring payments and creator payouts within the platform. Creators set membership tiers with monthly recurring fees, and fans automatically pay based on their chosen tier.

YouTube Channel Memberships pay creators automated monthly payouts from fan subscriptions. Fans subscribe to creators’ channels for exclusive content and perks, with automatic monthly payments. Through YouTube Super Chat, viewers send highlighted messages during live streams for a fee, paid automatically.

Twitch Bits enables automatic payouts from virtual item purchases and subscriptions. Viewers purchase virtual “bits” to tip streamers during live broadcasts, and they are automatically converted to real-world currency for the creators.

Creator-centric platforms

Ko-fi allows fans to send creators one-time “donations” of any amount, that are processed instantly through integrated payment systems. Creators can also create membership tiers and open an online shop.

Fanhouse allows creators to earn from direct messages, posts, and live streams, with automatic payouts to their linked account. Creators can share exclusive (premium value) behind-the-scenes content, and connect directly with their top fans.

Gumroad is an automated payout system for digital product sales. Sellers set prices for digital products like ebooks, videos, software or music, and the platform handles secure payments and automatic payouts to creators.

Bandcamp has been an economic success for independent musicians and the fans who love them. It processes automatic payouts from music sales to fans, and deducts platform fees. However, in 2023 it was sold to Songtradr, a B2B music licensing service. Half of Bandcamp’s employees were laid off in October 2023, and its future is unclear.

Spotify for Artists enables streamers to earn payouts based on listener purchases and streams, automatically deposited monthly. In November 2023, however, it announced the introduction of a minimum streams per song requirement for artists to gain a payout. This will be implemented early in 2024. The minimum streams per week to qualify for payment is 1,000. At the same time, the European Parliament continues to push Spotify to pay more to creators.

Apple Music Connect automatically pays musicians their royalties based on streams through the platform. It also offers users exclusive content, such as live radio shows.

This list is not exhaustive, new solutions and providers are constantly emerging, and some established players are in a state of change. The best system for any particular creator depends on their specific needs, platform usage, and audience demographics.

Sector challenges and considerations

High transaction fees or complex international regulations can hinder creators, especially those who are new to the marketplace. Creators often rely on platform-specific payment systems, limiting their control and flexibility, though new technologies like cryptocurrencies and blockchain offer potential for greater efficiency and transparency, but come with their own challenges and regulatory uncertainties.

Looking ahead

The future of the creator economy demands payment systems that are globally accessible to cater to creators and fans transacting across borders with ease. This helps creators of all backgrounds to participate.

Payment systems, creators and fans need to all be adaptable to new monetization models and technologies.

Introducing new methods and technology may not always be totally frictionless, and it is important for automated system providers to build trust among both payers and payees that their platforms are secure and protect financial information.

By fostering an environment where creators can easily receive payments from anywhere in the world, payment systems will continue to play a vital role in unlocking the full potential of the global creator economy.

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Clive Reffell

Clive Reffell

Clive has worked with Crowdsourcing Week to source, create and publish content since May 2016. With knowledge and experience gained in a 30+ year marketing career based in London, UK, he helps SMEs and startups to run successful crowdfunding projects, and provides support across wider marketing issues.

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