C2B Payments on Social Media – Will Retailers and Brands Improve the User Experience by 2030?

Picture this scene: You’re engrossed in a virtual catch up with a friend on Facebook®, and you catch sight of that DVD or book you’ve been thinking about getting. You’re keen to buy it, but you don’t want to leave your online conversation.

You pass on it and the merchant loses the opportunity.

This is the big issue that’s holding back the wider adoption of consumer-to-business (C2B) payments on social media platforms across the U.S. and Europe.

Today, the global trend of person-to-person (P2P) payments through apps like Venmo®, Apple Pay® and even Facebook Messenger®, have been around since eBay® acquired PayPal® nearly 20 years ago. However, in the scene described above, retailers and brands have an opportunity to improve how they accept C2B payments and remove the friction that consumers currently experience while shopping on social media platforms.

Amid the excitement of launching their new sales strategy on social media, far too many retailers and brands forget about the C2B payments aspect of the channel and thus miss an opportunity to drive revenue, experts say.

“We all like the convenience of doing everything in one place,” says Maria Prados, vice president of retail and B2B at FIS. “Before the pandemic, social media was seen as more of a marketing channel, but brands are now keen to integrate more shoppable features, such as Instagram’s ‘Shop Now’ button, into their social media channels.”

The problem, Prados says, has to do with a clunky user experience.

“Customers don’t want to leave their enjoyable social media experience to go to another website to finalize a payment. Many retailers and brands aren’t thinking about the payment upfront, but it should be at the forefront of their strategy and embedded at the heart of their social media accounts.”

The concept of C2B payments on social media has been brought sharply into the spotlight by COVID-19. A global study by Kantar® reported that social media engagement has increased by 61% during the pandemic, and 58% of consumers aged 13 to 37 are interested in purchasing items directly from their feeds.

These numbers are in line with the FIS 2020 Power Your Payments report, which surveyed 33,000 people across 12 countries and found that 53% had paid for a purchase through a social media site. To seize the growth opportunity of C2B payments on social media, industry experts say merchants in the West could take lessons from their counterparts in the East.

China is the undisputed leader in C2B payments on social media with its hugely popular app, WeChat®. This platform encompasses an entire ecosystem of services where users can send messages, call one another, order food, hail a ride, book a plane ticket and entertain themselves through one “super app.” Think Facebook, Twitter®, Uber®, your favorite airlines and Instagram® – and more –packaged seamlessly into one app.

The technology behind WeChat and other Chinese “super apps” like Alipay® is similar in many ways to the social media apps in the U.S. and Europe, but adoption and growth was driven through other reasons, experts say.

“It’s not quite right to say that China is ‘advanced’ – there is nothing particularly advanced about C2B payments on social media – but the penetration of C2B payments in the East are much higher,” says Aaron Press, research director, Worldwide Payment Strategies, IDC Financial Insights®. “These types of payments on social media in Asia grew out of culture and a set of needs that western markets don’t necessarily share.”

WeChat, for example, became an important part of modern Chinese culture by introducing its digital red envelopes in 2016. Traditionally, red envelopes filled with cash are gifted during special occasions including Chinese New Year and weddings. In doing this, WeChat has help digitize the process and made sending mobile payments a social norm.

Additionally, in some shops in China, cash is no longer accepted – only mobile payments. Frequently, those mobile payments are done through QR-code scanning on smartphones, although some retailers are experimenting with payments through facial recognition, meaning that shoppers won’t even need their phone to pay. China’s retailers also lead the way in livestream shopping and the use of augmented reality.

The pressure is on the West to keep up. Western consumers can currently send a payment to retailers through social platforms such as Instagram, but a smarter, deeper integration of payments and social media could help pave the way to a cashless future.

“I’m a little less bullish on C2B payments on social media in the West, though I think they have a place. In general, I’d say it’s in a merchant’s best interest to accept the methods of payment that their customers want to use,” says Press. “As western consumers embrace P2P payments to pay each other, merchants can be more welcoming to those customers who find social payment convenient and want to use it across other use cases.”

It’s also worth remembering that the implementation of an appropriate payments infrastructure needs to be combined with measures that build consumer trust, especially considering the media and government scrutiny of Facebook and Twitter.

“There are things that retailers can do to build and maintain that trust, such as ensuring local language and currency options,” adds Prados. “The Power Your Payments research also highlighted that 65% of people are more likely to pay if they see the lock symbol on the payment page, emphasizing a secure checkout.”

Social payments can sit comfortably in the wider plurality of payments.

There’s appetite and room for C2B payments on social media to grow and cement their place in the wider payments ecosystem, becoming a much more common choice as the plurality of money becomes more pronounced. At Sibos® 2020, author Lana Swartz, who penned New Money: How Payment Became Social Media, touched on this idea, highlighting how the concept of money is becoming more general – and social.

“We’re coming off the back of the long 20th century, when money became a mass media we all understood,” she said. “We used big, centralized infrastructures, and state-issued currency. But we’re now moving towards money as a more diverse, more social currency that is tied to new technology like our phones or watches. This may feel strange and more niche, for many, but we’ve been living with money plurality for years as we’ve used our Starbucks® points cards alongside cash. Moving forward, we’ll see this plurality becoming more familiar.”

C2B payments on social media fit well with this predicted fiscal future.

So long as retailers and brands can figure out the right payment process up front, these types of payments will become more established as people’s payment type of choice by 2030 as companies develop better and frictionless user experiences.

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