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Given the increasing pressure on Facebook’s leadership to come up with strategies that not only boost revenue but restore confidence in investors, it seems like there is no shortage of advice on how the company can better monetize their user base. 

One thing I haven’t seen, and I am going to adventure here, is developing a mechanism that allows Facebook users to make purchases on other websites, using their Facebook identity.

From the merchant’s perspective, this new API would work much like Facebook Connect and the “Like” button, so let’s call it the “Buy” button.

Facebook Buy Button

Facebook’s main challenge right now is figure out ways to increase revenue per existing user, and quickly. Without discounting market development efforts currently underway that will likely determine an increase in the social network’s popularity in countries like China and Russia, where they are not the main player as of now, the fact of the matter is that Facebook will never again experience the massive growth of its early days.

Facebook is a rich pool of demographic data waiting to be used by marketers. Newly added features to Facebook pages for businesses that allow brands to tailor their messaging beyond just location and languages spoken are welcome and should increase engagement. However, targeted display ads have been found to under deliver to marketers’ expectations. 

The company has also been harshly criticized for poor mobile experience by consumers, and lack of of an ad strategy by marketers. With mobile traffic about to overtake that of desktop computers, figuring out how to make it easy for consumer to engage across screens is critical.

Introducing the “Buy” button

On the other hand, earlier attempts to turn Facebook into a shopping destination are a great example of what happens when we ignore the context in which people do the things they do. F-commerce, as it came to be known, failed to realize that people go to Facebook primarily to interact with their friends, and not to shop. To paraphrase a Forrester analyst, it was like selling stuff to people while they are hanging out with their friends at a cafe.

But, what if that cafe had a loyalty program that benefited from the purchases you made everywhere else too. Or better yet, what if they offered a universal payment system that worked as a wrapper to your current credit cards? In other words, instead of bringing the stores to Facebook, take Facebook to the stores where consumers already do their shopping.

Facebook Credits already allows users to store payment methods for purchases within the platform, so it is conceivable that an external API could be built to provide a mechanism to use a Facebook account to make purchases elsewhere.

This could extend to brick and mortar stores through gift cards issued on the site or coupons, which are already a popular item offered by brands on their Facebook pages. After all, if people can pay for sow on Farmville, why shouldn’t they be able to pay for a meal?

I know this is a bit out there, but hey, why not? If not Facebook, whoever figures out a compelling way to make consumer identity not only mobile, but portable across devices, will be developing have a huge advantage for years to come.

Oscar Trelles

Published 21 August, 2012 by Oscar Trelles

Oscar Trelles helps organizations navigate the emerging technology landscape, with a focus on how new developments affect consumer behavior. Find him on Twitter.

3 more posts from this author

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David Quaid

almost 4 years ago

James Gadsby Peet

James Gadsby Peet, Senior Digital Services Manager at Cancer Research UK

This is definitely the way that Facebook needs to look to grow itself - basically acting like a community of users rather than a website. Tescos/Sainsburys all realised this in the last 15 years and have made huge inroads into exploiting their communities whilst adding benefit (or at least perceived benefit) to the end user...

almost 4 years ago

Oscar Trelles

Oscar Trelles, Agency executive, startup advisor, entrepreneur, connector. at R/GA

The obvious benefit for the company - charging a nominal transaction fee to merchants - could be significant, but even more valuable would be the data about what people actually buy and how it relates to the stuff they say they like on Facebook. That data would be worth a lot to marketers, if a big enough number of users got into it.

almost 4 years ago

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Matt Smith

This is inevitably where social media is heading along with mobile commerce as the future of how people purchase goods and services online. Facebook will soon be completely commercialised.

almost 4 years ago

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Isabella Wesoly

I like the sound of this. Would it remove the need for website vendors to have their own check-out?

almost 4 years ago

Oscar Trelles

Oscar Trelles, Agency executive, startup advisor, entrepreneur, connector. at R/GA

The way I thought of it, the "Buy" button would only a gateway payment that could be integrated with any shopping cart software and e-commerce suite. However, if they wanted to go all in and make it easier for merchants to adopt the technology, Facebook could acquire a startup like WePay and offer the whole package.

But, like I said earlier, given the fact that using Facebook to log in everywhere, as opposed to creating accounts for each website and app that requires authentication, a payment mechanism like the "Buy" button would provide marketers with more attribution metrics and insight into sales relevant to what people "Like" on Facebook.

almost 4 years ago

Ashley Friedlein

Ashley Friedlein, Founder, Econsultancy & President, Centaur Marketing at Econsultancy, Centaur MarketingStaff

It's not a new idea as such e.g. Google Checkout, Amazon Payphrase etc. Two big problems:

1. Retailers/merchants/whoever is doing the selling don't want to lose the customer data/relationship. That IS their business. Do you want to completely outsource your business to Facebook? Not really.

2. Customers might trust FB for 'social login' but for commerce? Google Checkout hasn't taken off. Microsoft tried and failed (Wallet), Amazon hasn't cracked it. Arguably only PayPal has had any success with a 'universal' online payment mechanism. And that still mostly comes via eBay (who own them).

almost 4 years ago

Oscar Trelles

Oscar Trelles, Agency executive, startup advisor, entrepreneur, connector. at R/GA

Good points, Ashley.

The idea of a "Buy" button, as I thought of it while writing this post, wouldn't seek to compete with the relationship between the merchant and the customer, but to provide the universal payment mechanism you mentioned. Fulfillment and other associated functions would remain the domain of the merchant, with the potential added value of access to any social data (e.g. what they like on Facebook) their customers may choose to provide via Open Graph.

Regarding whether people would actually opt to use Facebook as a payment method today, I agree that it is a little bit out there. But so was e-commerce itself in the mid-nineties, and the idea of using credit cards when they first introduced.

The bottom line is that, regardless of whether Facebook does it first or not, the need for a platform that allows consumers to manage their identity safely and make not only mobile but contextual, will become increasingly critical to make commerce more fluid as more transactions move to mobile devices.

almost 4 years ago

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