Meta Targets Small Businesses With New In-Chat Instagram Payments

July 20, 2022
Meta has launched a major new update to its Instagram social network app that allows users to message and pay for goods and services directly within the app's chat function.

Meta has launched a major new update to its Instagram social network app that allows users to message and pay for goods and services directly within the app's chat function.

On Tuesday (July 18), Meta launched a new in-app payments feature that will sit within the built-in instant messaging platform on Instagram.

The move will allow consumers to make purchases from small businesses directly in Instagram chats using Meta Pay.

In chats with qualified small businesses, Instagram users will be able to ask questions, make purchases and track their orders.

Likewise, within the same chat, businesses will be able to confirm purchases, create payment requests and collect payments.

“For example, if you’re interested in a backpack, all you have to do is send a message to the business about the one you love,” said Meta.

“From there, you can chat about customisations — like adding your initials — and then place your order right in the chat.”

To use Meta Pay, users are required to connect with either their PayPal account or a credit or debit card.

Extra security layers such as a PIN code or biometric verification can then be added to the Meta Pay account.

The new payment method builds on the Checkout on Instagram feature that was launched in March 2019.

Checkout on Instagram allowed consumers to buy products without having to navigate to a merchant’s external website. Instead, payments were processed by Meta Pay within the Instagram app.

When it was first launched, Checkout on Instagram was initially implemented only in the US and at a handful of big-name brands, such as Adidas, Burberry, Dior, H&M, Nike, Prada and Uniqlo.

In August 2020, Instagram expanded the service to all US businesses and creator accounts that have an official Shop.

However, Meta’s latest new payment feature is aimed at small businesses that do not yet have an official Shop.

With the ability to talk with customers, bill and collect payments in a single chat thread, Meta is hoping to entice these businesses to expand their presence.

“When businesses are ready to set up their digital storefront, they can use Shops on Instagram and Facebook,” said Meta.

“As we look toward the next chapter of the internet and the metaverse, we’re looking forward to giving people more access to tools like payments in chat that will make people’s lives easier.”

Meta Pay is currently available via Facebook in most countries worldwide, but via Instagram the service has so far only been primarily rolled out in Western Europe and North America.

As reported by VIXIO in November last year, both fintechs and bigtechs are looking for ways to move payments “up the funnel”, therefore bringing them closer to the point of product discovery.

At the same time, they are looking for ways to provide a clearer advertising journey and subsequent re-targeting of users.

Over time, this could also open up other opportunities to build a more merchant-centric offering that includes broader embedded banking and financial services propositions.

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