Can You Pay Someone Through Instagram?

Instagram has evolved beyond simple photo sharing to incorporate features that facilitate commercial activity. Many users inquire about direct fund transfers or purchasing goods and services through the application. This article clarifies how financial transactions can occur within or be initiated from Instagram, addressing common questions about its payment capabilities for individuals and businesses.

Person-to-Person Payments on Instagram

Direct person-to-person (P2P) money transfers between individual users are not a primary function of Instagram. While Meta previously offered some direct payment features, these functionalities have largely been phased out for general users in many regions. Individuals looking to send or receive money directly from friends or family rely on dedicated third-party payment applications.

External applications like Venmo or PayPal specialize in P2P transactions and offer robust security measures for direct money transfers. Although Instagram does not facilitate these direct individual payments, users can share payment requests or details for these external services through direct messages. The actual transfer always occurs outside of Instagram.

Instagram recently introduced a “payments in chat” feature, primarily for business-to-consumer transactions within direct messages. This allows eligible small businesses in the United States to generate payment requests and accept payments directly within a chat thread using Meta Pay. While this streamlines purchasing between a consumer and a business, it does not enable direct P2P transfers between individuals.

Purchasing Products and Services on Instagram

Instagram provides integrated shopping features, allowing consumers to purchase products and services directly within the application. This capability is primarily facilitated through Instagram Shop and Instagram Checkout. Businesses utilize product tags in posts and stories, a dedicated “Shop” tab on their profiles, and Instagram Checkout to offer a seamless buying experience.

When browsing Instagram, users may encounter posts or stories with product tags, indicated by a shopping bag icon. Tapping these tags reveals product details like price, description, and available options. If a business has enabled Instagram Checkout, consumers can complete their purchase directly within the app without navigating to an external website.

For the initial purchase using Instagram Checkout, a user provides their name, email, shipping address, and billing information. This information is then securely stored by Instagram to streamline future transactions, enabling quicker checkouts with just a few taps.

Businesses using Instagram Checkout are typically charged a transaction fee, around 5% of the sale price or a flat fee of $0.40 for sales of $8 or less. Meta often acts as a marketplace facilitator for purchases made through Instagram Checkout in most U.S. states, meaning it is legally responsible for calculating, collecting, and remitting sales tax on behalf of the seller. Sellers operating a business through Instagram must report all income from online sales to the Internal Revenue Service (IRS), regardless of the payment method. This income may be subject to federal income tax and, if the activity constitutes a business, self-employment taxes.

Using External Payment Links via Instagram

Beyond its native shopping features, Instagram also serves as a platform for businesses and individuals to initiate transactions completed on external payment systems. This method involves leveraging Instagram’s linking capabilities to redirect users to third-party payment platforms. Common strategies include placing payment links in an Instagram bio, utilizing link stickers or swipe-up links in Stories, or sharing links directly through private messages.

External links can direct users to popular payment platforms, such as PayPal.Me links, Venmo profiles, or secure checkout pages hosted by payment processors like Stripe or Square. When a user clicks one of these links, they are taken outside the Instagram application to complete the transaction on the chosen third-party service. Transaction fees and terms for these payments are determined by the external platform, not Instagram itself.

For sellers, accepting payments through external links means they are responsible for their own financial record-keeping and tax obligations. This includes accurately reporting all gross income earned from these sales to the IRS, as required by law. Payment processors typically issue a Form 1099-K to sellers who meet certain thresholds, currently $600 for the tax year. However, all taxable income must be reported even if a 1099-K form is not received. Sellers are generally responsible for collecting and remitting sales tax in accordance with applicable state laws, especially if the transaction occurs entirely off-platform where Instagram does not act as a marketplace facilitator.