Summary List PlacementFacebook integrated Shopify's checkout system, Shop Pay, into Instagram and plans to bring it to Facebook Shops, its small business selling platform that it also recently launched in partnership with Shopify, in the coming weeks, per The Wall Street Journal.
Shop Pay is a buy button that stores payment and shipping credentials, allowing registered users to choose the payment method at checkout to quickly make online transactions without having to manually input payment information. The system, which has 60 million global users, also offers package tracking capabilities and an installment lending service at checkout. Integrating Shopify into Instagram and Facebook Shops will help Facebook expand social commerce accessibility, enabling it to lead the growing space. Shop Pay adds to Facebook's standing payment offerings, including standard credit and debit card checkout as well as PayPal checkout. Although Shop Pay has a much smaller user base than PayPal, which has approximately 377 million global active users, the integration still helps Facebook expand frictionless payment offerings to customers, enabling it to foster increased purchases on its platform so that it can become a more retail-centric space. Facebook's integration of Shop Pay is also beneficial for Shopify since it marks Shop Pay's first expansion outside of Shopify clients—enabling Shopify to extend Shop Pay's reach and volume potential. The move comes as social networking platforms look to evolve into shopping destinations amid the recent rise of social commerce.
Consumers have been spending more time on social networks—making way for the rise of social commerce. Social network usage grew in 2020 as consumers spent more time at home: Average time spent on social networks in the US grew 16.4% annually, coming out to approximately 65 minutes per day—and this average is expected to hold steady in 2021, according to eMarketer estimates from Insider Intelligence. This rise likely helped make way for a surge in social commerce sales, with the metric climbing 37.9% year over year (YoY) to $26.77 billion—and it's projected to maintain its growth trajectory to reach $36.09 billion in 2021, according to our forecasts. Frictionless checkout solutions can help social networks move further into the retail space. Offerings like one-click buy buttons help eliminate friction at checkout and lead to higher in-house conversion rates. Boosting these conversion rates has been an issue within social commerce, as only 18.7% of social buyers said they made their last social commerce purchase directly from the social platform's checkout page, and 42.3% of US adults said they don't trust social platforms with their payment credentials. Buy buttons help decrease these concerns by acting as a payment middleman—allowing social networking sites like Facebook to boost conversions within their platforms.
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