At the start of this month, Facebook began a sneaky scheme of providing Instagram payments to certain users, and this feature allows users to provide their debit or credit details once, and then use their financial information to make whatever product or service advertising payments they need to make on Instagram. Currently, this payment feature is being used for making appointments only, but it is expected to expand its horizons, particularly with the advent of Shoppable Ads on Instagram.
Experts believe that Instagram payments are a massive threat to other digital payment processing networks, particularly PayPal, which have enjoyed huge success in the last few years. Naturally, powered by Instagram Payments, Facebook would be able to provide a much more immersive and beneficial pricing experience for all business who seek to advertise. In this article, we will take a detailed look at the dynamics of this new feature, and how it might lead to the redundancy of PayPal business.
The Mechanisms of Facebook Payments
According to the CEO of Facebook, Mark Zuckerberg, the philosophy of Facebook’s payments is to create money by allowing businesses to do the same. He believes,
“In general, our strategy is to offer those services at cost, and make it so that businesses can bid what it is worth to them to run ads in the system.”
In simpler words, Facebook uses payments to provide greater advertising values, and allowing businesses to convert their ads into leads with a quick and easy process. And with the advent of Instagram Payments, Facebook seeks to improve the return on advertising investments. Facebook intends to boost the return for marketers, and with every passing year, Facebook entices business to go beyond the average ad price to gain more value by paying more for advertisements.
Naturally, adding payments allows marketers to gain better responses for their advertisements, and having its own payment processor allows Facebook to charge businesses according to its own costs. Instagram payments has a great many advantages, and it will definitely increase the average ad cost. It is expected to see Facebook ad auctions encouraging businesses and marketers to process their payments using Instagram Payments as opposed to adding a third-party to the transaction. Competitors like PayPal will have a great deal to lose as marketers will see more advantages of using Instagram Payments, such as avoiding paying premium costs.
Making Instagram More Immersive
Instagram Payments is likely to keep users glued to Instagram as they will be able to complete the entire transaction without leaving the app. According to Zuckerberg,
“That’s going to make people’s experience better, so that way we can just do that in line.”
Instagram is widely famous, and providing users with a smooth and effortless facility of in-line payment processing will naturally make them spend more time on Instagram. The opportunities to show ads on Instagram will also rise, and it will mark a new trend of making speedy payments without a third-party or network to facilitate the transaction. Needless to say, Instagram Payments will make online advertising much more flexible, completing hijacking the need to use PayPal as a middle-network.
So how to use Instagram Payments?
Not all users will have access to this feature, but if you do, you can just enter your credit card details in your Instagram profile. See the screenshots from Apple Iphone below: