As more and more social media platforms integrate their platform mechanics with commerce, traditional financial service providers these days are having their monopolistic habits dealt back to them in double spades.
The latest entry into the fray is Instagram that announced that it will be adding a checkout feature to its current mobile app construct which means that users will be able to use Instagram to make purchases rather quickly. Instagram announced that it will be charging retailers a 20 % commission or sellers fee and with the likes of Adidas, H&M, MAC Cosmetics, Prada, Zara and many more already on-board, it seems that it would not be long before others follow suit.
The new feature comes in the form of a big blue ‘Checkout on Instagram’ button right at the bottom where all users have to do is tap it enter delivery information and payment method and place the order. Prior to this, making a transaction on Instagram was often regarded as a hassle and in most case scenarios users abandoned their shopping carts due to the frustration of using the ‘pop-up website of the seller’.
Much of this can be attributed to Instagram’s parent company Facebook that has been rapidly monetising its market reach potential both effectively and efficiently. The company has been steadily moving its social media platforms towards the commerce and payments landscape and the impact that it is having has been significant and according to market analysts, the impact that it is going to have is going to blow everything out of the water due to the social media giant’s ability to offer the same services offered by Pay Pal, Skrill and other even more traditional ‘financial channels’ such as Visa and Master Card at much lower cost for consumers.
At the current moment, payment information that is stored in Facebook can only be utilised on Instagram, however it will not be too far-fetched to say that Facebook will eventually allow users to use their credentials across its family of apps seamlessly owing to the fact that FB is in the midst of developing a unique payment product that involves the all mighty WhatsApp and the Blockchain.
The decision makers at Instagram have come to realise that shopping does represent an enormous business opportunity that albeit is not new, but given the consumer reach that Instagram has will definitely ‘shake things up’ and carve a path for FB to make the final dash. The math behind it was based on the fact that even as it was, more than a 100 million users tap on goods (shopping posts) every month and this initiative is expected to realise that potential.
This initiative according to the powers that be on Instagram is just among other long-term investments that the company is working on that directly involves consumers and that they have more aces up their sleeves
The introduction of the new checkout option with the app could be seen as only the first step!
Source 1: https://techcrunch.com/2019/03/19/instagram-checkout/
Source 2: https://business.instagram.com/blog/new-to-instagram-shopping-checkout