Last editedSept 20213 min read
Your business probably already uses social media for marketing and customer service, but are you harnessing the power of social commerce? The latest technological solutions offer a way to seamlessly blend social media outreach with payment processing, for quicker and easier transactions. Keep reading to learn more about the benefits of a social media e-commerce business.
What is social commerce?
In January 2021, 20.5 million Australians reported using social media – roughly 80% of the total population. That’s a lion’s share of customers for Australian businesses to tap into using social commerce, but what exactly does this term mean?
Social commerce refers to transactions that take place using social media platforms and messaging apps. Businesses can directly embed payment links in some cases and accept payments from the app in others. Apps like Facebook, WeChat, WhatsApp, and Snapchat are examples of platforms that can be used to accept social payments, as well as digital wallets like Apple Pay and Android Pay.
How do social payments work?
To send or receive these social payments, users must link their debit or credit card details to the payment channel. Then, when the user signs into their social media app, they can send cash directly to your business to pay for goods and services. The social media app’s payment channel works as a third-party gateway connecting buyer with seller, just as any other payment gateway would on an e-commerce website.
Social commerce is closely related to peer-to-peer payments, another major trend in the digital payment sector. In both cases, you can make in-app purchases with the funds sent directly to any contact. In the case of P2P payments, this might be a monetary gift to your friend. With social commerce, the payment goes to a merchant or business to make a purchase.
For some social commerce examples, we can look at services like Facebook Messenger payments. This links debit cards to a user’s Facebook account, allowing users to transfer money using the messenger app. Additional social commerce examples include apps like Snapcash, which is linked to user Visa or MasterCard debit cards. Most Australian banks now offer in-app payment methods connecting with digital wallets such as Apple and Android Pay.
5 business benefits of social commerce
Now that we’ve given a quick overview of how buyers make purchases using social payments, what does this mean for businesses? When you build a social media following, you can reach out directly to your audience with targeted advertising. If your audience wishes to make a purchase, they can do so directly over the social media channels. This cuts out the added step of redirecting an interested buyer to your website. Keeping that in mind, here are 5 business benefits of social commerce:
Transaction speed: With no need to redirect to a separate payment processor or e-commerce site, buyers can complete their transaction with a single swipe or tap of a button. This improves conversion rates for your business, cutting out the lengthy checkout process.
Cashless convenience: Along with a faster processing time, social payments are appealing to consumers who don’t want to deal with the burden of carrying around cash. Instead, they can buy and sell goods with an all-in-one digital wallet.
Seamless customer experience: With customers already embracing social media en masse, it makes sense to tie this to commerce for an easier payment system. With social media payments, consumers don’t have to remember separate bank codes, credit card numbers, or passwords.
E-commerce integration: A social media e-commerce business has no need to set up a brick-and-mortar location. Indeed, it’s no longer ever necessary to set up an online storefront. For small businesses and entrepreneurs, you can host everything you need on social media platforms.
Secure payments: Social payment platforms come equipped with rigorous security standards. There’s also less change for payments to go astray, as deposits go directly into your business bank account once the transaction is approved.
How to keep social payments secure
Online security is vital to the success of social payments, so you’ll need to take care that you take all precautions necessary to protect your clients’ data. When users sign up for a social media payment app, they’ll be linking their credit or debit card details with personal information. Before you start selling products online in any capacity, be sure you have basic features like encryption and tokenization in place. You should also ensure that your site is PCI DSS compliant to protect cardholders from fraud.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.