Does social media and payments make sense together?

Written by on March 23, 2016 in Billing & Payments, Opinion with 0 Comments

social mediaWould you buy something through social media?

This may sound like a ‘would you send your bank account details to the sister of a Nigerian Princess who calls you dear’ in an email, but according to Euromonitor more and more of us would. They conducted some online research and found that 25 percent of respondents have bought something through a social media channel.

At first glance, that is an incredible figure, particularly when you consider that ‘the annual transaction value of online, mobile and contactless payments will reach $3.6 trillion this year,’ according to Juniper Research. A quarter of us are clicking ‘buy’ when posting videos of talking dogs and sneezing cats – apparently. Digging a little deeper, the research makes a little more sense. The vast majority of the 25 percent are either under 30 or from emerging markets – mainly, reading between the lines – China.

Perhaps it is not just a factor of age of population but the age of social media that is key here. In Western Europe for example, Facebook is now populated by 40 and 50 somethings sharing pictures of family holidays and said talking dogs, whereas in China, and Asia, social media is much more than that. Hugely successful WeChat, for instance, is seen and used as a portal, which you can use ‘to hail a taxi, order food delivery, buy movie tickets, pay utility bills and even book a doctor’s appoint all in a single, integrated app.’ It has quietly rocketed to number one – in payments.

This, of course, is very different from how we view social media in Western Europe.

We have mentioned several times now an obviously rather important interview that Wired did with David Marcus late last year. Marcus was in at the beginning of PayPal and poached by Facebook to develop Messenger. After several micro seconds of wondering why, it became obvious that the plan was that Messenger will become far more than just, er, Messenger. Already you can order your Uber ride via the app. In the future, Marcus wants customers to do everything via Messenger. To use it as a portal in the new, mobile sense of the word. Mobile itself will help drive this change as companies like Facebook throw millions at creating a seamless, easy journey for younger people, half of whom already use their mobile to buy things.

Maybe, therefore, Facebook – and others – have seen the future and believe that social media as a portal and an easy way to play, purchase and pay is the way forward. Maybe they believe that this idea will catch on in regions where social media is mature. After all, companies are already integrating marketing campaigns via Instagram and other channels.

For Facebook’s sake, let us hope that they are right. They seem to be betting the farm on being right, because, at some point, as we have said several times now, a one-sided advertising model is thin ice to skate on for long.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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