If you’re reading this, you might not be able to name a single creator.
But your kid probably can name five, 10, even a dozen social media stars who are all paying the bills — and then some — by monetizing their online platforms.
That’s because today’s hyperconnected, hyperonline world has turned creators into everywhere stars, able to tap into a truly global audience, and it’s helping transform social commerce into a global industry worth north of a trillion dollars.
Which is why it’s about time for financial institutions to wake up to the fact social media stars might just be the digital equivalent of tomorrow’s small and medium-sized business (SMB) segment.
“Creators are generally underserved today in their financial lives,” Marie-Elise Droga, head of Fintech at Visa, told PYMNTS CEO Karen Webster. “They can’t be looked at through the lens of an individual consumer — this is the fastest growing category of SMBs in the world.”
It’s no longer an opportunity that anybody can afford to ignore, Droga added.
That’s because at over $1 trillion, social commerce is one of the fastest growing ecosystems around today. And the creators behind it represent one of the most valuable business owner segments for banks and other financial services providers savvy enough to tap into their needs.
Small businesses often struggle with cash flow challenges, and it’s no different for creators.
As Droga explained, creators typically don’t have access to lending to grow their business because they are treated as individual consumers. Beyond that, this new class of frontier SMBs also rarely have access to business analytics that can help drive decision-making within their internal organizations, or access to the appropriate tools to build loyalty and rewards programs for their consumers in order to drive customer stickiness.
“It’s a mountain of an opportunity to play a role in getting that ecosystem of merchants, of financial institutions, of FinTech together to really help the creators accelerate growth and to build a safe, durable, scalable business globally,” she said.
As sole proprietors of an emerging SMB generation, social commerce creators increasingly need digital payments tools designed for the money flows of their nontraditional businesses.
Making the creator segment such an attractive one is the fact that social commerce offers an on-ramp to create lifetime-value driven relationships with younger generations including millennials, Gen Z, and even the emergent Gen Alpha.
See also: Visa Targets Creator Payouts with Visa Ready Creator Commerce Program
“COVID came and put [social commerce] on steroids,” Droga said. “There are north of 300 million individual creators out there – and they are ever global in nature. As financial institutions wake up to the opportunity, they need to treat creators as SMBs through the lens of the financial services they develop.”
Particularly because social creators live and die by click counts and view counts, having the available working capital and financing at hand for them to capitalize on a viral moment by capturing audience momentum can help turn creators from a one-hit wonder that fades into obscurity into a force to be reckoned with.
“Creators need help in developing their business, developing the business plan, the business itself, how to grow their business, how to move it from being something that they dabble at and pursue to really being a small business,” Droga said.
That’s why, she said, Visa has a dedicated team focused on understanding and developing solutions for creators and social platforms.
“It’s also global in nature, which syncs very nicely with our DNA, and unlike retail, the social opportunity already bleeds into so many segments — including gaming,” she added.
Fortunately, innovative digital payment solutions are already helping SMBs of all sizes, no matter their Main Street, move money faster, more seamlessly, and in a more compliant and convenient way.
These products and services just need to be turned toward the creator segment. Out of sight for older decision makers shouldn’t mean out of mind when the opportunity is this large.
Today’s global world is almost purpose-built for democratizing the opportunity for people to leverage and monetize their skills, whatever their skills happen to be.
And rather than writing off social commerce stars — smart financial services providers should be looking for ways to underwrite them instead.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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