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The Influencer Marketing Hub's 2026 Benchmark Report, published in May 2026 with more than 600 marketers surveyed, found that 72.2% of respondents expect their influencer budgets to increase by 50% or more this year.
Gigapay is a mass creator payout platform built as a Merchant of Record, sitting between brands and creators as the single legal counterparty for tax, invoicing, and compliance.
That kind of budget growth changes the shape of the payment problem, because it turns creator payouts from an occasional finance task into a continuous cross-border operation with real tax and reporting stakes.
This article breaks down the difference between Merchant of Record and payouts-only creator payment software, shows how each model handles compliance, and gives you a framework for choosing the right one for your 2026 program.
Key Takeaways
- A Merchant of Record takes on the tax and legal liability of paying creators.
- Payouts-only software moves money to creators but leaves compliance and tax filings with the brand.
- Global creator programs with cross-border payouts benefit most from the Merchant of Record model.
- Payouts-only tools can work for smaller domestic programs where the brand keeps compliance in-house.
- Gigapay operates as a Merchant of Record, files DAC7, KSK, KU14, and pays creators instantly.
Why Choosing Creator Payment Software Matters More in 2026
Creator programs are getting bigger, more international, and more continuous. The market context sits behind the shift. U.S. annual creator economy ad spend is projected to reach $43.9 billion in 2026, an 18% increase over the prior year, according to the Association of National Advertisers.
At the same time, roughly 73% of brands have moved toward performance and affiliate payment models, which multiplies the number of small, frequent, cross-border payouts a finance team has to move through the books.
The consequence is that "how do we pay creators?" stops being a vendor question and starts being an infrastructure question. Choosing payment software used to be about which button pays out fastest.
In 2026 it is about which contractual model your brand is willing to live inside, because that model decides who carries the tax liability, who files the reports, and who answers the tax authority when a query lands.
Two shapes of software have emerged to serve this market:
- Merchant of Record platforms take on the legal and tax responsibility attached to buying the creator's deliverable.
- Payouts-only platforms move money and stop there. The difference between them is structural, and it changes the shape of your creator program.
Which Creator Payment Regulations Changed in 2026
Cross-border creator payments used to sit in a gray area where a slow tax authority and a fast marketing team could both pretend the problem was small. That period ended.
The US 1099 reporting threshold rose from $600 to $2,000 for payments made on or after January 1, 2026, under the One Big Beautiful Bill Act. The higher threshold sounds like relief until you remember that most creator payments still cross it once you count the same creator across multiple campaigns in a year.
In parallel, DAC7 in the EU now requires platforms to report creator earnings directly to tax authorities, and Germany's Künstlersozialabgabe levy falls to 4.9% in 2026, charged to companies on top of what they pay creators, and it can apply to a single cross-border hire.
None of these rules care whether your brand ran the campaign in-house or through an agency. The obligations attach to whoever is the formal counterparty. That is the exact question a Merchant of Record answers on your behalf, and it is the exact question a payouts-only tool leaves on your desk.
What Is a Merchant of Record for Creator Payouts?
A Merchant of Record is the legal entity that owns the transaction from a tax and compliance standpoint. In the creator economy, that translates to a specific mechanic. The MoR formally purchases the creator's deliverable, then resells that deliverable to the brand, and issues a single consolidated invoice to the brand for the whole campaign or batch.
Gigapay's service agreement describes it plainly. Gigapay buys the creator's deliverable and concurrently resells it to the client, becoming the formal counterpart, which means the administrative and legal responsibilities connected to that purchase move to Gigapay.
In practice this covers identity verification, tax ID validation, invoicing, and cross-border tax reporting for DAC7 in the EU, KU14 in Sweden, and KSK in Germany. Onboarding requirements for creators drop as well. They can register with Gigapay as an individual, a sole trader, or a company, and they do not need a VAT number.
One nuance matters for finance leaders reading this closely. In its MoR capacity, Gigapay is not the party responsible for withholding or paying social security or other taxes, or for making insurance contributions. Each party still complies with its own tax responsibilities under applicable laws.
Sweden's Employer of Record service is the exception where Gigapay carries employer obligations directly.
What Is a Payouts-Only Creator Payment Software?
Payouts-only software is payment infrastructure. It moves money from your account to the creator's account, at speed, across countries and currencies. That is real value on its own. Sending a EUR payout to a creator in Poland used to take three days and a currency conversion form, and modern payouts-only tools do it in seconds.
The category includes Stripe Connect, PayPal Payouts, Wise, and Tipalti in its AP-automation configuration. Each of them is genuinely good at money movement. What they do not do is become the legal counterparty to the creator. The transaction still runs between your brand and the creator directly, which means your brand keeps the tax filings, the vendor onboarding decisions, the invoicing responsibility, and the compliance design.
Payment facilitators clear transactions but leave tax calculation, withholding, and compliance documentation on your finance desk. That is the shape of the model. Payouts-only tools were built to solve payment friction, and compliance liability was never in the design brief.
The distinction shows up most clearly in three places. In your ERP records, a payouts-only brand still onboards each creator as a distinct vendor.
- On tax filings, the brand collects W-9s, W-8BENs, and issues 1099s or the equivalent in every jurisdiction where a creator lives.
- On auditor exposure, when a tax authority asks who paid whom, the answer points at your brand.
Merchant of Record vs. Payouts-Only Creator Payment Software: Side-by-Side Comparison
The two models look similar at the surface because both end with a creator getting paid. Underneath they behave differently on every axis that matters at scale.
The row on ERP records is the one that tends to move the finance conversation. A brand running 600 creator collaborations a year can compress 300-plus vendor entries into one under an MoR model, which is not a cosmetic change to a spreadsheet. It changes what a quarterly close looks like.
How to Choose Between Merchant of Record and Payouts-Only Software
The right choice is not the same for every brand. A useful way to run the decision is to look at five signals from your own program.
Signal 1: How many creators do you pay a year, and where are they?
Programs paying fewer than 50 creators a year, all in one country, can usually stay on payouts-only software without much pain. Programs paying hundreds of creators across borders start losing hours to vendor onboarding, tax paperwork, and reconciliation. That is the point at which the Merchant of Record model starts saving money on its own.
Signal 2: How much of the creator mix is nano and micro?
Nano and micro creators frequently do not have a registered business or a VAT number. Payouts-only tools that require business registration for onboarding create a hard wall in front of that segment. An MoR removes the wall because the MoR is the one on the invoice, so creators can register as individuals and still get paid.
Signal 3: How many jurisdictions do you touch?
If your program pays creators in more than three countries, you are already inside DAC7, likely KSK, and often KU14. Filing those reports internally means budgeting for tax counsel or building the process in-house. Handing those filings to an MoR is usually less expensive than the headcount required to do them properly.
Signal 4: Where does compliance work sit today?
Finance and legal teams already carrying heavy regulatory workloads tend to prefer the MoR model because it moves the liability to a vendor whose entire job is carrying it. Teams with existing tax counsel and low creator volume can sometimes justify staying on payouts-only, because the marginal cost of adding creator payouts to work they already do is small.
Signal 5: What is the cost of the closing bottleneck?
Every finance leader has seen the month where 300 individual creator invoices land at once. The cost of that bottleneck is not just admin hours. It also shows up as missed campaigns, delayed payments to creators, and the creator churn that follows. Merchant of Record platforms flatten that bottleneck to one invoice per batch, which changes what the close cycle feels like even if the absolute cost per payout is similar.
How Gigapay Works as a Merchant of Record for Creator Payouts
Gigapay was built specifically for the shape of a creator payout program, which is why the MoR model is the default rather than an add-on. The platform pays creators instantly across 65+ countries and 50+ currencies, using local payment rails including SEPA Instant in the EU, Faster Payments in the UK, and ACH in the US, so a creator in Warsaw gets the same experience as a creator in Los Angeles.
Compliance is where the difference shows up on the finance side. Gigapay handles DAC7 filings in the EU, KU14 filings globally, and KSK exposure in Germany. Gigapay verifies identity and tax IDs at onboarding, automatically, based on the creator's country and entity type. Creators register as individuals, sole traders, or companies, and no VAT number is required.
The results are measurable:
- Boozt's Brand Activation Lead, Christina Oliosi, described how the platform enabled the brand to work with nano and micro-influencers the team had been unable to reach for years, and the result was a 3x increase in collaborations without adding headcount.
- WPPMedia's Global Senior Manager, Martin Leiva Godoy, described a significant reduction in the time spent managing payments. Kolsquare, an influencer marketing platform, embedded Gigapay directly so that creators can invoice inside the platform they already use.
The pricing model matches the shape of the problem. Gigapay charges €279 a month plus a 4.9% admin fee per payout on the base plan, with volume-based discounts and dedicated CSM access on Enterprise for brands moving €1.8M+ in annual payout volume.
The ROI case Gigapay publishes for a brand running 600 creator collaborations a year comes to roughly €139,590 in manual annual admin cost versus €46,350 through the platform, with admin hours moving from 840 a year to 60.
What Are the Hidden Costs of Payouts-Only Creator Payment Software?
Comparing MoR and payouts-only strictly on transaction fees misses the actual cost structure. Payouts-only tools price the payment. The compliance, onboarding, and reporting work all sit outside that number and land on internal teams.
A finance team running payouts-only software for a mid-sized creator program typically absorbs vendor onboarding for every new creator, W-9 or W-8BEN collection, 1099 filing at year-end, DAC7 filing in the EU, KSK exposure in Germany, invoice reconciliation across hundreds of individual creator transactions, and the internal audit trail for every one of those actions.
None of that appears on the payouts-only invoice. It appears in finance headcount, in tax counsel bills, and in the cost of the campaigns delayed while paperwork clears.
The Merchant of Record model prices the transaction fee visibly and includes the compliance work in the same number. That is why the comparison at scale so consistently tips toward the MoR model. The payouts-only price looks lower on the pricing page and higher once the total cost of ownership sits on one slide.
Conclusion
Gigapay is the Merchant of Record built for the shape of modern creator programs, sitting between brands and creators as the single legal counterparty so tax reporting, invoicing, and compliance move off the brand's books.
The decision between Merchant of Record and payouts-only creator payment software comes down to which model your brand is willing to sit inside, because that model decides who holds the tax liability, who files the reports, and who carries the vendor sprawl in your ERP.
For global programs paying hundreds or thousands of creators across borders, the MoR model consolidates that entire burden into one vendor and one invoice, and Gigapay does that while paying creators instantly across 65+ countries.
Book a demo with Gigapay to see what your current creator program would look like with the compliance work moved off your finance team.
Read Next:
- How Gigapay Pays Creators Instantly Across 50+ Currencies and Local Rails
- The Global Creator Economy Report 2026
- How Should Agencies Manage Influencer Payments in 2026
FAQs:
1. What is the difference between a Merchant of Record and payouts-only creator payment software?
The difference between a Merchant of Record and payouts-only creator payment software is that a Merchant of Record becomes the legal counterparty to the creator and takes on tax and compliance liability, while payouts-only software only moves money and leaves the tax and compliance work with the brand.
2. How does a Merchant of Record handle taxes for creator payouts?
A Merchant of Record handles taxes for creator payouts by acting as the formal buyer of the creator's deliverable, filing cross-border reports such as DAC7, KU14, and KSK, and answering tax authority queries directly, which removes those filings from the brand's finance team.
3. Why do global creator programs prefer Merchant of Record software in 2026?
Global creator programs prefer Merchant of Record software in 2026 because it consolidates hundreds of individual creator vendor records into one entry in the ERP, files the cross-border tax reports required by DAC7 and similar regulations, and removes the need for creators to have a registered business to get paid.
4. When is payouts-only creator payment software the right choice?
Payouts-only creator payment software is the right choice when a brand runs a small domestic creator program, has fewer than 50 creator payouts a year, keeps existing tax counsel in-house, and does not need to work with nano or micro creators who lack a registered business.
5. Is Gigapay a Merchant of Record or a payouts-only platform?
Gigapay is a Merchant of Record, which means it becomes the legal counterparty to the creator, buys and resells the creator's deliverable to the brand, files DAC7, KU14, and KSK reporting, and pays creators instantly across 65+ countries and 50+ currencies.
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