Instagram appears to be diving further into the social commerce arena with the unannounced launch of a native payments feature that operates under the same rules as Facebook’s payments system.
The Facebook-owned app announced last March that it planned to enable people to book services or make purchases directly via Instagram business profiles, and native payments mark the next step in the process.
An Instagram spokesperson would only say that the native payments option is available through a limited set of partners and businesses.
Dinner reservation application Resy is part of that group and “you can assume Shopify and BigCommerce are next,” said Rachel Tipograph, founder and CEO of social commerce platform MikMak. “The biggest advertisers in the world do not use these platforms. They use enterprise software, or they have homegrown back ends, or they don’t own their ecommerce and rely on big box retailers.”
TechCrunch first reported on Instagram’s native payments option, following a tip from Momento founder Genady Okrain, and he reported that the feature appeared to be available to some users in the U.S. and U.K.
TechCrunch added that the Instagram profiles of some restaurants that are Resy clients are now offering the native payments option for booking.
Instagram’s native payments feature will allow users to register debit or credit cards as part of their profiles and set up security pin numbers, so that they can make purchases without leaving the Instagram app.
Tipograph wondered if trusting Instagram with this information would be a problem for people.
“Whether customers at scale will enter their credit card information into Facebook’s and Instagram’s settings has yet to be seen,” she said. “Data protection is paramount not only for users, but the businesses they’re serving, and with GDPR around the corner, there are a lot of hurdles here.”
Instagram made its big leap into social commerce with its launch of shoppable tags last March, after having tested them as early as November 2016, but shoppers must still leave Instagram and complete the checkout process on retailers’ websites.
“With shoppable tags, there’s always another click-through to a landing page or website, and there’s the possibility that when you open up a site outside of the app, something doesn’t function,” said Kamiu Lee, CEO of influencer marketing platform Activate. “This native payment feature would take out that extra click and make it more appealing for the brand to capture consumers while they’re scrolling through their feeds.”
And Tipograph pointed out that shoppable tags work with organic in-feed static photos, while Facebook said at its F8 annual developer conference last week that more Instagram users are checking Stories than their feeds.
“This update will likely be most relevant for brand accounts until influencers have the capability to specifically pick brand accounts to link to within Instagram,” said Lee. “Although this could be great for conversion as it takes out an extra step, typically, brands want to drive traffic to their sites—whether it’s through their own accounts or through influencers—so it will be interesting to see if this will truly take away from the current methods that do drive site traffic, such as ‘swipe up’ and ‘link in bio.”