How to Pay Instagram Influencers?

How to Pay Instagram Influencers?
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With half of the companies in the US facing layoffs – many of them tech companies – many are wondering what this could signal for the broader economy and how it will impact business' marketing budgets. With large companies like Uber scaling back their marketing spend, what does that mean for other companies in social media and the creator economy? What does that mean for influencers and content creators?

In 2022, influencer marketing will grow to a record $16.4 billion industry. And while some companies may be slashing spending on advertising, others are re-investing those dollars into influencer marketing.

‍What is influencer marketing?

Influencer marketing is a type of social media marketing that uses endorsements, testimonials, and product reviews from social media influencers or people with a dedicated audience on social media channels like Instagram, Snapchat, TikTok, and LinkedIn.

As social media evolves, so has influencer marketing, with more and more brands beginning to see the direct impact a digital marketing campaign can have on a business's sales and revenue. Social media influencers are sometimes the most efficient and cost-effective way to increase and improve brand awareness. Because of this, brands see added value in expanding their roster of talent beyond traditional social media celebrities and mega-influencers to lifestyle and food bloggers, macro-influencers, nano-influencers, and content creators.

Search and connect with the right influencer

Searching for the right influencers for your campaign can seem daunting, but it doesn’t have to be. Begin your search for the best Instagrammers for your brand by identifying the type of influencer you’re looking for. You’ll want to discover influencers with a strong engagement rate, typically, a good engagement rate is between 1% and 3%. To calculate someone’s engagement rate on Instagram, divide the total number of likes and comments by the number of followers and then multiply that by 100 to give you a percentage. From there, you can manually search for various Instagram accounts using hashtags or use a discovery tool like Grin to help you source the right influencers.

An influencer’s rate can vary depending on the number of Instagram followers they have. Nano-influencers and micro-influencers are known for creating good engagement amongst their followers. Shopify recently reported that 77% of marketers said micro-influencers top their list of ideal influencers. While macro-influencers and mega-influencers are often widely known or recognized because they have a large follower count, it’s best to consider who your target audience is and if their audience is aligned with yours.

Beyond engagement rates, make sure the influencers are aligned with your brand’s values and mission. It’s important to build long-lasting relationships with your influencer marketing partners to ensure a strong partnership and promising metrics.

Instagram as a tool for influencer marketing

Today you can be an influencer or content creator across various social media platforms, from TikTok and Twitch to YouTube and Snapchat. Instagram rose to be the first player where people could monetize off of social media posts and stories and changed the landscape of digital and influencer marketing as we know it. It remains one of the top platforms where influencers can make a lucrative living from content creation, sponsored posts, and brand partnerships.

However, paying an Instagram influencer is not as simple as transferring payment from point A to point B. Influencer payments are a multiplayer game that involves vendor onboarding, collecting and storing sensitive information, managing outstanding deliverables and payments, dealing with tax compliance, and integrating seamlessly with accounting software. If you're an influencer marketing manager, agency, talent manager, or third party who works with Instagram influencers, consider this article as the ultimate guide to walk you through the best ways to pay influencers.

ACH payments

If you work with Instagram influencers frequently, ACH transfers make recurring payments easy. ACH transfers transfer funds from one bank account to the other. ACH payments offer some convenience, whether you work with Instagram influencers through influencer marketing or affiliate marketing programs. Affiliate programs are typical programs done through e-commerce businesses that payout Instagram influencers a certain percentage of affiliate sales.

The benefit of ACH transfers is that they are much faster than other forms of payment, like mailing a check and waiting for it to clear, it's less costly, and you can automate payments to your Instagram influencers.

However, there are limitations and costs associated with ACH payments. For one, banks can limit the amount transferred, and the fees are costly if you pay out international Instagram influencers. Managing and keeping track of their information can cost you a lot of time going back and forth and manually updating these things.

Paper checks

Paper checks are another method to pay influencers, but like ACH payments, they come with certain limitations and require a lot of time to cash. Before the electronic transfer of funds and the rise of other payment platforms like Venmo and PayPal, paper checks were the norm.

While you still have to go through the process of ordering checks and mailing them to the receiver's address, checks are often an easy and go-to method for businesses. Still, in today's increasingly virtual age, they are unreliable – think lost checks, bounce backs, fraud, and lengthy payment windows.


PayPal is one of the most commonly known forms of payment because it's been around for a long time. People chose PayPal for a variety of reasons. For one, it's widely known and easy to sign up. PayPal also allows you to pay via various payment methods such as ACH, credit card, and PayPal wallet.

It also makes it easy to pay international creators and for marketing teams to release funds without going through the tedious funding or approval process with their Accounts Payable team. Instagram influencers can also expect to receive payments fast if they're using PayPal, but frequent users commonly complain that transferring the funds to their bank account is costly.

While PayPal seems to be the better alternative to your internal vendor onboarding process, PayPal doesn't solve the unique challenges of paying Instagram influencers, especially at scale. Brands and agencies using PayPal to pay Instagram influencers are likely not abiding by PayPal's terms of service to avoid high merchant fees.

What's commonly known as "the friends and family method" indicates that any money transferred is not in exchange for a good or service. Suppose you're working with an Instagram influencer and sending them free products in exchange for publishing an Instagram post, or they're making dedicated Instagram stories about that product. The influencer is technically the "seller" or "merchant" in this case, and the content is the "good/service." Some brands will send payment to Instagram influencers via the "the friends and family method" to avoid the 2.9% fee associated with it. It's not uncommon for this to happen, as the cost to transfer the funds to their bank account can rack up. However, the downside to this method is it could trigger friction between the Instagram influencer and PayPal and often end up with their account freezing or locked.

It's safe to say that trying to bypass paying the fee is not worth it, but there's no denying that these fees can be costly, especially if you're working with micro or nano-influencers.


While there are more ways for Instagram influencers to get paid now, whether from posting to their Instagram stories, sharing a reel, or Instagram posts, they're looking for an easy and fast payment solution. The creator economy has also presented an opportunity to startups and other influencer marketing platforms that have popped up in the space to help solve the unique needs and challenges of the 1099 workforce.

If you're still looking for an alternative to your current method, it's worth looking into Lumanu. Lumanu is a free-to-use platform for Instagrammers and creators that accept all payment methods from any business they work with or invoice. Don't believe us? Look at how Lumanu stacks up against other alternatives like

It's a secure and safe way to pay influencers for any influencer marketing campaign and an Instagram influencer's content. If you're a brand, agency, or talent manager Lumanu Payments makes it easy to pay all of the influencers you work with one click of a button. Lumanu also transfers funds same-day ACH, ensuring influencers get paid quickly and timely. You can also manage all your transactions in one simple and clean dashboard.

For Instagram influencers, payments are received the same day and transferred to their bank account without incurring fees – a win-win for both parties. Lumanu's unique value proposition, also known as EarlyPay, makes it possible for both the brand/agency/talent manager and the Instagram influencer to get paid once the paid partnership is completed.

The best thing about Lumanu is that your marketing or influencer marketing strategy doesn't need to be fully baked to start paying out influencers.

To learn more about how your team can payout Instagram influencers seamlessly and save time so you can focus on scaling your business, schedule a demo with us.

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