MW Why some Facebook and Instagram advertisers are freaking out about a new payment policy
By Charles Passy
Meta won't let some advertisers pay with credit cards anymore - and these business owners are feeling the pain
Meta, the parent company of Facebook and Instagram, could save significant money by requiring advertisers to pay via their bank accounts rather than credit cards, experts say.
Thanks to his advertising spending on Facebook and Instagram, Brian Waldman says he has enjoyed a seemingly unlikely perk: He gets to travel the world in style.
That's because, up until now, Waldman has charged the online ads he purchases to promote his Camp Snap camera company on his credit cards. And he's racked up plenty of points in the process that he redeems for vacations, including a recent winter holiday trip to the Caribbean that would have otherwise cost him thousands of dollars.
But that may no longer be possible: Starting in April, Meta Platforms (META), the social-media giant behind Facebook and Instagram, will stop allowing some businesses to use credit cards for their ad purchases. Instead, Meta will require them to pay by other means, including directly from their bank accounts.
So Waldman is seeing his points perk go away, and says he may pull back on his ad spending with Meta and look at other channels as a result. "I love the points so much," he told MarketWatch.
Waldman is not alone. Others are commenting about the situation - ironically, by taking to social media to voice their frustrations about what they're losing in rewards, be it in points or cash.
"RIP business class flights," one person commented on X.
Another got into specifics, saying their credit-card rewards equated to $400 monthly "in free money" based on their Meta ad spend. The commenter added that the arrival of April "is gonna hurt."
A Meta spokesperson said the change involves a very small number of advertisers and was being done to update and streamline the company's billing. The spokesperson added that the affected advertisers are being given advance notice, and will be offered preapproved credit lines.
The goal, the Meta spokesperson said, is to make the transition as smooth as possible.
Analysts and experts say it may not be a complete surprise that Meta would make such a move. When people - or businesses - pay by credit card, it's the merchant who pays the processing fee that allows for the transaction. And those fees typically equate to 1.5% to 3.5% of the purchase.
Do the math, notes Chris Pollard, the founder of Ads Uploader, an ad-launching platform, and it becomes apparent why Meta sees the logic in making at least some advertisers switch to another payment method.
"The savings are enormous," he said.
How much are those savings? Again, it's difficult to say without knowing how many advertisers are affected. But given that most of Meta's $200 billion in annual revenue comes from advertising, "it's a meaningful amount," said Gil Luria, an analyst with D.A. Davidson.
And Luria says it's just the kind of savings Meta is probably looking for these days, given its push into artificial intelligence and its multibillion-dollar commitment to building data centers.
"They're using every dollar of cash they have," said Luria of the company's data-center initiative.
While many of the business owners who use Meta profit personally from the credit-card rewards they accrue - again, think luxury travel - it's not the only way they benefit. Some fuel the rewards back into their business.
"It's not me wanting to sit in a lounge because I get mimosas," said David Suk, the CEO of Baby's Brew, a brand of baby-bottle warmers. Suk says the card points earned from his company's Meta ad spend goes toward booking free business flights, saving thousands of dollars in travel expenses annually.
Suk is also considering his ad options in light of the Meta change. "We're looking at other avenues to market" the brand, he said.
But it's not an easy decision, Suk added, because Meta "is the 800-pound gorilla in the room" when it comes to online advertising. And clearly, Meta's bet is that it will lose only so much advertising revenue because of the newly announced payment change versus how much in savings it will reap.
Youssef H. Squali, an analyst and managing director with Truist Securities, doesn't think Meta has too much to worry about. "The threat of mass migration is very small," he said of the potential headwinds Meta may face from advertisers.
On top of that, Meta isn't alone in making changes its ad-payment policy. In 2024, Google $(GOOGL)$ $(GOOG)$ notified what a spokesperson called a small number of its ad buyers that it was shifting them to make payments via their bank rather than by credit card. The Google spokesperson said the company provided support to help advertisers manage the change, and that they have since adjusted well.
In the end, however, some ad buyers say earning credit-card points is too valuable a perk to easily forego when they consider how they want to promote their company That doesn't come as a surprise to Dave Grossman, founder of MilesTalk, a website for those who track their points and miles. "It's an obsession," Grossman said of the racking-up-the-points game.
Even Grossman admits there may come a limit, however. If Facebook or Instagram are invaluable tools for a business to attract customers, that should probably take precedence over credit-card point tallies and the need to travel in style, Grossman notes.
And if a business owner is thinking otherwise, Grossman had this to say: "That's foolish."
-Charles Passy
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(END) Dow Jones Newswires
March 16, 2026 13:05 ET (17:05 GMT)
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