Instagram payments could take on Paypal
Facebook owned social network Instagram has quietly launched its own payments feature so that users can buy and pay within the app. Facebook and Instagram haven’t made a formal announcement but users in the US have already seen the feature in action. It seems to have been live for a week or two.
The payments system asks for users to input their credit or debit card information once. Subsequently, these saved details can be used to pay for products or services advertised on Instagram. So far, the service applies only to people booking appointments, but it could quickly and easily expand its scope.
The payment system is particularly relevant to the recent launch Shoppable Ads on Instagram. That’s where users can directly purchase items that are being displayed on the site. Instagram is a predominantly visual photo sharing service that is particularly popular with the millennial generation and has huge potential as an ecommerce vehicle. Just like with Pinterest, the visual theme is a good way to showcase goods and attract shoppers.
We know that Facebook is becoming increasingly attracted to ecommerce and the Facebook marketplace has been getting plenty of interest lately, although it is notable that they have so far shied away from monetisation and profiting from trade thats occurring across the various Facebook properties.
In the recent earnings call with Wall St. analysts, the Facebook philosophy was queried and it was confirmed that monetising ecommerce and payments isn’t currently part of the strategy:
In general, our strategy is to offer those services at cost, and make it so that businesses can bid what it is worth to them to run ads in the system.
– Mark Zuckerberg, Facebook founder and CEO
Facebook is well placed to to be an eBay challenger and payments on Instagram, with its very passionate fanbase, will also be in a good place to challenge PayPal on payments. But as it stands at the moment, that’s not the primary motivation.