Through Matt Jackson, Head of Partner Development, EMEA at PPRO
A staggering 3.8 billion people use social media, about half of Internet users in the world. With these numbers in mind, social media giants are eager to reach the digitally connected consumer and monetize their user bases. Gone are the days when social media was just a place to see what friends were up to and give them a “like”. With people like TikTok, Facebook and Instagram in mind, buying products online is now as easy as liking a friend’s post. In fact, with more than one in three buyers in the world having made a purchase on social media in the past year, social media is quickly becoming the new online market of choice.
However, if it’s a good tool for attracting customers, social commerce has to go hand in hand with digital payments to truly unlock success. Converting browsers to social media buyers will depend heavily on a brand’s ability to offer a range of local payment methods at checkout.
A growing opportunity for traders
In the UK, by the age of 12, most children have access to a social media account, but that doesn’t mean it’s the only audience social media is for. Seniors in the United States are the fastest growing group of Facebook users, with their numbers doubling between 2019 and 2021, indicating a lucrative opportunity for marketers drawing on a wide range of demographics. .
In fact, Facebook is definitely ahead of the pack when it comes to social media – with over 2.7 billion monthly active users worldwide. For European regions like Italy, the pandemic has also contributed to the explosion in the use of social media. Time spent on Facebook’s suite of apps has increased 70% in March 2020 – indicating the potential for adoption of social commerce as people become accustomed to using these platforms to access shopping, entertainment and communication.
For China however, a country where Facebook, YouTube and Twitter are blocked for consumers, sites such as Tencent, WeChat and Weibo have attracted millions of users, making China one of the largest social media markets. in the world. With multiple demographics across the world now engaged in social media channels and more than comfortable with online shopping, the opportunity for traders to trade on these platforms is greater than ever.
Unlocking the power of social commerce
Due to the extensive reach and power of social media, brands that embrace social commerce can evolve rapidly. Anyone can do it, from international companies to individuals selling their products on Instagram. But, it’s more than just adding a “Buy Now” button. While social media platforms certainly have the power to unlock online and cross-border growth, the process will not be successful if merchants do not operate with consumers’ payment preferences in mind.
To enable seamless transaction through social media channels, merchants and payment service providers (PSPs) need to take a highly personalized and localized approach to digital payments. Consumers have become accustomed to choice when it comes to online payments – from buy now, pay later (BNPL) offers like Klarna to increasingly popular offers payments by bank transfer such as Pay by Bank App or Trustly. For this reason, expectations regarding payment preferences have exploded in recent years. So much that 44% of UK consumers abandon a purchase if their preferred payment method is not available. To ignore this when selling through social channels would be a huge mistake and a missed opportunity for retailers operating on these platforms.
A global strategy with local payments at the heart
While digital payments have the power to unleash the true power of social commerce, integrating a diverse portfolio of payment methods is no easy task. While merchants are increasingly aware of the need for a social strategy focused on local payments, the cost and complexity associated with such integrations is a major hurdle for businesses. In fact, for smaller e-commerce players in particular, local payment options can seem completely out of reach.
To overcome this, merchants and payment service providers are increasingly turning to infrastructure providers to meet the demands of global consumers. Partnerships like this mean that merchants and PSPs can take advantage of payments technology and local market knowledge on the ground.
Speed to market is paramount in today’s digital-first retail age, and merchants able to get started and operate with a diverse acceptance of good local payment methods will quickly find success. able to get ahead of the competition.
Those who neglect to consider the importance of local payments will find themselves a step ahead of their competition and lose access to thousands of potential customers.