Facebook Payments and the Rise of Social Commerce
Facebook’s more than one billion active users equal an enormous captive and potentially lucrative audience for entrepreneurs. The promise of commerce on the platform, however, has been hindered by Facebook’s flawed and thankfully now defunct Credits program.
As of September 13th, Credits was replaced by local currencies, or just “Payments,” which is smoother, faster, easier and more flexible. Now if you want to buy something inside Facebook there are no extra steps like having to first purchase credits before using them to buy something else.
Sounds crazy in hindsight, right? People are used to seeing something they want and just buying it. Entrepreneurs count on that easy path to purchase to boost sales. Extra steps kill conversions—if people have to think twice, or make more effort than necessary they’re likely to vanish before buying.
Using Payments is easy; it doesn’t look or feel like anything new or onerous. It’s just click a “Buy” button and use whatever currency you’re used to using on the Web: PayPal, a credit card or a gift certificate. Simple. Fast. Familiar. Payments works across the globe too, with localized currencies. Anyone can sell anything directly to anyone else through the Social Network. We’ll call it, “the Rise of Social Commerce.”
Social commerce isn’t conducted from a central point. It’s distributed from the edges, viral and unobtrusive to the user experience. Like I said, people hate to learn new to do new things. The harder it is to learn, the greater the chance of failure. That’s why Payments is so important for buying and selling on Facebook.
When coupled with the tightly integrated Canvas Application, Payments perfectly complements commerce initiatives inside of Facebook—you no longer have to push people to another site. Both the Canvas app and Payments quickly reach the global Facebook audience using the social graph. The two working in tandem make content commerce infinitely sharable, almost effortless. It’s true viral marketing and sales together.
Although well-intentioned, Credits slowed that process. It added an extra step on top of already complex problems like pricing in different currencies; having to poll the credits server and the vendor’s server for real-time pricing and slowed transactions, to name just a few examples.
Payments eliminates those hurdles and provides more flexibility, such as precise pricing (Credits had to be rounded to the nearest $ .10) and being able to price virtual goods appropriately for different markets. Say you’re selling a game here and somewhere overseas. Using Payments, pricing can be modified to maximize profits here while broadening the user base with a less expensive option for other markets at the same time.
Payments also provides a platform for buying and selling directly to and from one another other by using the social graph to accelerate audience and revenue growth. That’s going to encourage the development of a host of new businesses designed specifically for social commerce.
Our company, LittleCast launched at the same time Facebook was sunsetting Credits and transitioning to the Payments platform. It paves the way for the viral marketing and sales we count on to help video producers get better known. As soon as video is uploaded to LittleCast, we place an in-line media player directly into the producer’s Facebook Timeline. The video becomes visible in the producer’s friends’ and fans’ Newsfeeds, where they can watch a 30-second preview and immediately make a purchase—all without leaving Facebook. As users purchase, the content becomes available to others from the purchasers’ news feeds.
Payments helps the audience hit “Buy” without thinking too much and without having to leave the site. Selling and buying video content is now fast, seamless, social and best of all, Payments represents a new opportunity that doesn’t disrupt the old way people are used to conducting business.