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Behind Shopify’s move to embed payments on Facebook and Instagram

Originally posted on tearsheet.

  • Shopify landed a partnership with Facebook to expand seller checkout through Shop Pay on Facebook and Instagram.
  • According to Shopify, 28 percent of young online shoppers made purchases through social media.

Last week, Shopify announced a partnership with Facebook to expand its online checkout platform Shop Pay to all Shopify merchants selling across Facebook and Instagram. The expansion will enable Shop Pay as a payment option on Facebook Pay for consumers on Facebook and Instagram.

Currently the feature is available in the U.S on Facebook Pay for Shopify merchants using checkout on Instagram. In the coming weeks, it will be accessible to Shopify sellers in the U.S using checkout on Facebook.

“Facebook continues to be one of our most popular sales and marketing channels for our merchants,” said Carl Rivera, general manager at Shopify and head of product at Shop Pay.

“For example, at the start of the pandemic from March through April, marketing on Facebook and Instagram via Shopify’s channel integration saw 36 percent growth in monthly active users — a trend that continues to rise — paving the way for the very natural expansion of Shop Pay onto these platforms.”

According to Rivera, Shopify sees social shopping as a growing area of commerce driven largely by a younger demographic who are more likely to use social media to discover new brands and shop.

Shopify’s Future of Commerce report states that 28 percent of younger online shoppers said they purchased via social media, compared to 20 percent of middle aged online shoppers and 8 percent of older consumers. It also demonstrates that 54 percent of younger consumers who purchase from independent retailers discover brands through social media compared to 43 percent of middle aged consumers aged between 35 and 54 and 25 percent of consumers older than 55.

“Social commerce is a very effective tool for e-commerce that has only just begun gaining momentum and widespread usage,” said Alexander M. Kehoe, the co-founder of digital marketing and strategy agency Caveni Digital Solutions. “Listing your products on every channel available is fairly standard for most e-commerce sellers. The inclusion of even more easily accessible channels to place products on means that e-commerce providers are positioned to benefit significantly.”

In addition to its social media expansion, Shop Pay allows users to track orders and see the carbon emissions offset from the deliveries of their purchases. According to Shopify, Shop Pay has offset 75,000 tons of carbon emissions, which is the equivalent of 85 million trees protected in the Peruvian rainforest.

“With 53 percent of consumers saying they prefer green or sustainable products, we’re now making it possible for more consumers who check out on Facebook and Instagram to shop sustainably,” said Rivera.

In 2020. Shop Pay processed more than 137 million orders and by the end of the year and has facilitated nearly $20 billion in cumulative GMV since its launch in 2017. A Shopify study found that checkout on Shop Pay is 70 percent faster than a typical checkout, with a 1.72x higher conversion rate.

According to Joe Sinkwitz, CEO of influencer marketing network Intellifluence, Shop Pay’s social media expansion will open up significant business opportunities for social media influencers. Through increased monetary incentives, influencers will be in the position to market Shopify enabled products which will ultimately encourage more purchases.

“From an influencer perspective, we’re seeing a lot of excitement surrounding the Shopify integrations into Instagram and Facebook, as that will give creators a sizable increase in monetization capacity, and will be great for those brands hosted on Shopify to have the additional sales channel,” said Sinkwitz. “We expect the integration will in time be a primary driver of influencer marketing requests, in terms of activating Instagram as a more direct sales channel.”

Source: tearsheet

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