Written by Josh Constine (@joshconstine), writer for TechCrunch:
Facebook is trying out letting you pay for ecommerce purchases from other businesses without leaving its site or app. For now it won’t be charging the few small and medium-sized businesses in the US to test this new Buy button on their News Feed Pages posts and ads. When I asked if Facebook would be charging businesses for the feature eventually, it said “it was not disqualifying that option” in the future.
Rather than clicking away to a merchant’s site, the Buy button lets you complete the entire purchase flow within Facebook, which could boost conversion rates and endear retailers to the social network. You can use a credit card you have on file with Facebook, enter new payment details and save them for future use, or just checkout and not store your payment info. The feature is privacy safe, and Facebook won’t pass payment details on to other advertisers. Users who have
Getting A Cut Of Ecommerce
Facebook made several forays into ecommerce over the years. It tried a Pinterest-styleCollections feature with buy buttons that led off-site back in 2012. It enabled on-site payments to charities with its Donate Button, last year. And most recently, it’s been testing an “Auto-Fill With Facebook” feature that automatically enters your payment details when you’re making a purchase in a third-party ecommerce app. Now it’s experimenting with letting you make purchases of physical good from for-profit ecommerce retailers entirely within its walled garden.
A Buy button recently surfaced on Twitter, indicating it too wants to try hosting ecommerce transactions. The method could also be how Pinterest eventually gets deeper into ecommerce.
If the test is succesful and rolls out, Facebook could eventually earn money on the feature by charging a fee or revenue share in exchange for processing payment and improving conversion rates. It could also use the purchases to prove return on investment to advertisers, encouraging them to buy bigger campaigns. Collecting credit card info could also help Facebook with other commerce-related intiatives.
Shaving Down The Purchase Funnel
Whether its websites, apps, social media, or ads, with ecommerce, it all comes down to conversion rate. Can you make someone who might be interested in buying something actually complete the purchase. The problem is this usually involves a narrowing funnel where each step of the process hemorrhages potential customers. Two especially lossy steps are getting the customer to the checkout screen, and having them painstakingly enter their credit card number.
Facebook effectively eliminates both these steps with the Buy button. You don’t have to leave the comforting blue chrome of Facebook and your friends. And even if you’ve never bought something from a merchant before, you don’t have to re-enter your payment details if you’ve already stored them on Facebook. You just click Buy, and click again to confirm, and the item is on its way to your door. It’s like the candy they sell in the grocery line. You’re already at checkout with your credit card out, so it’s easy to make an impule purchase.
By shaving down the time and effort from interest to purchase, Facebook could get more people plopping down cash for ecommerce purchases. That’s something retailers might be very willing to pay for.