Inside DAC7: The EU’s Newest Tax Directive & Its Implementation Status [March 2023]
The EU’s newest tax directive, DAC7, which applies as of 1 January 2023, imposes new obligations on online marketplaces that have sellers based in the EU.
SUCCESS STORY
Nexus
Paid-to-play: Nexus provides an all-new source of income to gamers
50K+
strong community of gamers, streamers & game influencers
100s
of hours of manual payment & tax prep work saved
83%
reduction in time spent processing payouts
Nexus
Company Info
Website
Industry
Creator economy (video games)
HQ Location
Austin, Texas
Customer Since
2020
Recipients
Video game influencers, streamers
Payout Countries
Global
Nexus is a monetization platform that lets video game streamers and influencers sell games directly to its viewers. Every sale from a gamer’s shop entitles them to commissions, making a seamless seller-payout experience critical. After integrating Trolley, Nexus streamlined its payouts and end-of-year tax processes, saving hundreds of hours of manual work each year.
It’s the early 2010s, and streaming gameplay is taking off. Games with big streaming audiences, like Rocket League, Call of Duty, Minecraft and League of Legends are becoming top downloads.
Suddenly, publishers and advertisers realize that streamers have significant audiences available. A few elite streamers make bank from sponsorships.
This is for top players. Thousands of mid-level streamers have plenty of influence, but because they’re not on the “leaderboard,” they are limited in how they can monetize their channels.
Suddenly, publishers and advertisers realize that streamers have significant audiences available. A few elite streamers make bank from sponsorships.
This is for top players. Thousands of mid-level streamers have plenty of influence, but because they’re not on the “leaderboard,” they are limited in how they can monetize their channels.
It was vital that any payouts platform we chose would minimize fees for creators, especially international payees. That’s a big reason we went with Trolley; it’s imperative that we help our community earn a living doing something they love.
Jack Inscoe, VP of Operations at Nexus
By 2020, gamers/entrepreneurs Zak Steltz, Adam Whipple and Justin Sacks have decided to tackle this problem head-on and co-founded Nexus.gg. Not just an excuse for its employees to game all day, Nexus works with game publishers to reward streamers who influence game purchases—regardless of their follower count.
The Challenge
Using Nexus, influencers can obtain a unique creator code and sell video games and in-game content. With their channels and streams acting as built-in marketing channels, influencers can promote that creator code directly to fans so they can receive credit for any in-game purchases followers make.
Nexus’ community of 50,000+ gamers and creators spans the globe and they are primarily focused on top-tier games like Path of Exile, SMITE, and Paladins. Some of the top creators include Karmakut, Mathil1, Turin, and Rexsi.
In 2020, Steltz, Whipple, and Sacks raised $5.5 million of funding to build out and expand the platform. Jack Inscoe joined Nexus as VP of Operations shortly after this. Looking to optimize the workflows for the many departments he oversaw, he immediately noted how the finance team manually handled creator payments and taxes.
Nexus’ community of 50,000+ gamers and creators spans the globe and they are primarily focused on top-tier games like Path of Exile, SMITE, and Paladins. Some of the top creators include Karmakut, Mathil1, Turin, and Rexsi.
In 2020, Steltz, Whipple, and Sacks raised $5.5 million of funding to build out and expand the platform. Jack Inscoe joined Nexus as VP of Operations shortly after this. Looking to optimize the workflows for the many departments he oversaw, he immediately noted how the finance team manually handled creator payments and taxes.
“One of the most important things we do is help our content creators make a living; it’s core to our mission."
— Justin Sacks, CEO and co-founder of Nexus
Inscoe saw a time crunch looming. Instead of developing the Nexus platform, building partnerships with influencers, or forging the relationships with video game publishers they would need to scale, operations teams were over-invested in facilitating payments.
At the end of each month, the development team exported reports detailing the sales of individual storefronts. Finance then used this data to send payments—one by one—through the corporate bank account or via a PayPal account. For international payments, the teams faced a lot of data entry work to set up wires. With PayPal, issues with the CSV import feature meant they had to issue individual payments to keep the ball rolling.
Beyond this, creators needed to reach out to the partnerships team to track payments, and engineering had to pull reports to answer these inquiries. This meant a stream of emails back and forth and was, in general, an operational nightmare, one that Inscoe knew could grind the Nexus operations team to a halt as the company scaled.
Lastly, armed with Google Drive and some custom code, a contract bookkeeper processed the year's payout information to produce a mountain of 1099s and 1042s tax forms as each tax year wrapped up.
At the end of each month, the development team exported reports detailing the sales of individual storefronts. Finance then used this data to send payments—one by one—through the corporate bank account or via a PayPal account. For international payments, the teams faced a lot of data entry work to set up wires. With PayPal, issues with the CSV import feature meant they had to issue individual payments to keep the ball rolling.
Beyond this, creators needed to reach out to the partnerships team to track payments, and engineering had to pull reports to answer these inquiries. This meant a stream of emails back and forth and was, in general, an operational nightmare, one that Inscoe knew could grind the Nexus operations team to a halt as the company scaled.
Lastly, armed with Google Drive and some custom code, a contract bookkeeper processed the year's payout information to produce a mountain of 1099s and 1042s tax forms as each tax year wrapped up.
"Before Trolley, our finance, partnership, accounting, and dev teams spent a ton of time gathering info just to communicate about payouts. Trolley gives our community the tools they need to track their payments themselves, so we can focus on building for our customers.” — Jack Inscoe
“The whole process amounted to a terrible game of telephone,” Inscoe confides. Manual, individual payments with a high potential for error cost them time and made for a bumpier creator experience.
The Solution
With a mandate to scale and seeing manual payments as a roadblock to this, Nexus started looking for a partner to help them automate the whole payouts process.
Nexus spent three months looking at different payment providers like Stripe, Tipalti, Hyperwallet, and Bill.com. Ultimately, they chose Trolley because it met its specific payout and tax needs while sharing a mandate to do right by creators.
The development team found the Trolley API easy to implement, and the finance team was delighted that the integration let them effortlessly manage outgoing payments, centralize records, and onboard new creators.
Trolley solved Nexus’ onboarding logistics and security concerns. Trolley’s embeddable widget makes it easy for streamers to submit payment data, and Trolley does the security heavy-lifting, storing payees’ sensitive information with bank-level encryption.
Nexus spent three months looking at different payment providers like Stripe, Tipalti, Hyperwallet, and Bill.com. Ultimately, they chose Trolley because it met its specific payout and tax needs while sharing a mandate to do right by creators.
The development team found the Trolley API easy to implement, and the finance team was delighted that the integration let them effortlessly manage outgoing payments, centralize records, and onboard new creators.
Trolley solved Nexus’ onboarding logistics and security concerns. Trolley’s embeddable widget makes it easy for streamers to submit payment data, and Trolley does the security heavy-lifting, storing payees’ sensitive information with bank-level encryption.
“We love Trolley’s clean onboarding experience for our content creators. They also handle tax form creation, so we spend almost no time managing sensitive creator information." — Jack Inscoe
The Results
Now, Nexus’ billing process is as automated as possible. At the end of every month, a script runs to produce batches of payments that can be quickly approved in a few minutes by a member of the finance team. While manual validation is still needed for edge cases like refunds or stolen credit cards, Trolley has reduced overall payment processing time by 83%. .
“Automation has reduced the amount of cognitive overhead or the worry that we may have missed something or made a mistake,” Inscoe observed. “It feels like the weight of payouts is completely off my shoulders.”
The experience for the gamers has also improved significantly; now that Nexus uses Trolley, creators can view upcoming payouts through the platform. “Gamers can track payments without sending a single email to our team,” says Inscoe. “Our support teams aren’t building ad-hoc customer reports; they’re solving problems.”
Trolley has been so practical that Nexus has also started using it as an accounts payable tool to make other payments to vendors and game publishers.
“Automation has reduced the amount of cognitive overhead or the worry that we may have missed something or made a mistake,” Inscoe observed. “It feels like the weight of payouts is completely off my shoulders.”
The experience for the gamers has also improved significantly; now that Nexus uses Trolley, creators can view upcoming payouts through the platform. “Gamers can track payments without sending a single email to our team,” says Inscoe. “Our support teams aren’t building ad-hoc customer reports; they’re solving problems.”
Trolley has been so practical that Nexus has also started using it as an accounts payable tool to make other payments to vendors and game publishers.
The Future
As Nexus continues to expand its reach to more content creators and is becoming a household name in the gaming world, the Nexus team is focused on growing its platform to provide live service video games with support-a-creator programs. This will allow games to reward influencers and content creators even more for playing a developer’s game.
Inscoe knows the Nexus model is a great way to align incentives for gamers, content creators, and game publishers. "As we attract more global influencers and content creators to our growing platform, we're happy that Trolley will be right there, providing us with a powerful payments engine."
Inscoe knows the Nexus model is a great way to align incentives for gamers, content creators, and game publishers. "As we attract more global influencers and content creators to our growing platform, we're happy that Trolley will be right there, providing us with a powerful payments engine."
Trolley is clearly the future. If your business or platform has anything to do with creators, nothing comes close to how well Trolley handles the headache of payouts and tax upkeep. Great software, great team, great vision.
Justin Sacks, CEO & Co-Founder at Nexus
