- Key insights: Visa and TikTok issued a debit card for content creators in the U.K.
- What's at stake: Content creators on the social media platform have irregular compensation patterns, and the card is a way to access funds quickly.
- Key statistic: Among creators on multiple social media platforms, 86% of creator-run businesses are self-funded and 49% experience late payments, according to Visa.
Visa has been making inroads into the
Called Creator Card, it's designed to give users tools to separate business and personal finances. The card and business account enable users to access their earnings faster and spend money immediately, Visa said. Visa,
The card is a way for TikTok creators to access their funds a bit quicker to help manage cash flow as well as provide a way to manage their business expenses separate from their personal bank accounts, according to Ben Danner, a senior analyst for Javelin Strategy & Research. "Often small businesses intermingle personal/business finances which can create problems down the road. The win for Visa is branding and positioning as well as capturing network fee volume," Danner told American Banker.
The creator economy, which refers to entertainment and other content delivered on web channels such as TikTok and YouTube, surged in popularity during the COVID-19 pandemic. Goldman Sachs, for example, has said the
"This is another good example of a trend we've been seeing of launching highly tailored financial products to specific communities, often by marketplaces and brands that manage those communities rather than traditional card issuers," Zil Bareisis, a director at Celent, told American Banker, citing Uber's card for drivers and Chime's early wage access service.
TikTok and Visa's debit card is designed as an answer to creators' often intermittent income. Viewers watching live content on the social network can give creators gifts, which are eventually converted to real income.
"For content creators, income doesn't arrive on a predictable schedule. It comes in bursts and across platforms, making it harder to manage finances or reinvest in growth," Jonathan Kolozsvary, global head of small business for Visa, told American Banker in an email.
Visa also hopes to sell small-business payments technology to creators, which the card network argues the financial services industry underserves.
"Many are also effectively running small businesses, yet without the financial tools that help traditional businesses manage cash flow …we're helping creators access their earnings faster, separate personal and business finances, and spend, plan, and reinvest with more confidence so they can focus on creating and growing, not chasing payments," Kolozsvary said.
Among creators on multiple social media platforms, 86% of creator-run businesses are self-funded and 49% experience late payments, highlighting the ongoing cash flow challenges they face, according to a survey of 1,000 content creators Visa conducted with Morning Consult in the U.S., U.K., Brazil, Australia and the UAE
While TikTok is widely known as a video site, it has partnered with financial institutions and
"Just like Uber drivers, TikTok content creators are earning on the platform, and want to have access to those funds easier and faster," Bareisis said. "At the same time, many of them don't necessarily have a traditional business account, which results in commingling their personal and business finances. This card helps separate those funds and better keep track of their earnings from content creation."
