A small button for Facebook and an enormous opportunity for Ecommerce. ‘Buy,’ the application being rolled out by Facebook, is an application that routes purchasing products through a user’s Facebook page on any electronic web access device that can support the application.
It is a single point entry into the market that allows a consumer to make a purchase instantly and securely. It will operate in the equivalency of Facebook writing a single check to the company for the sum of its user’s purchases at the end of the business day. While this is being primarily viewed as an in store application, it is also a useful tool for ecommerce sites.
Ecommerce businesses have a challenging problem in the buying process that stems from the ability of customers from anywhere in the world being able to buy their product. There is not a single currency for the world marketplace, and every nation has its currency that must be calculated for correct values at the legally recognized exchange rates. In order to be competitive a business must be able to fulfill a customer purchase request anywhere in the world. Ecommerce sites can potentially lose money with inaccurate or out of date exchange formulas. If you sell a product for one dollar and receive one peso, you are going to go quickly out of business if the behavior continues. The Buy option through Facebook solves the problem by taking responsibility for the conversions of currency.
The number one deterrent for newcomers to e-commerce on the consumer side of the equation is the protection of their information, money, and personal data. By reducing operations to a single payer system with high-security protocols the risks are substantially reduced for consumers against fraudulent websites. Facebook application will be validating the website transactions and the consumer will not have to commit their data to an unknown entity. False imitation websites that mimic the authentic sites lose their efficacy when the transaction is processed through a Facebook account. If they attempt to imitate the Facebook Buy application, the application will not have the credit card data to complete the transaction. With significantly reduced risks to the user, the fear of shopping online will be mitigated.
Combining brick and mortar inventory purchasing power with online commerce opportunities through a single pay entity will standardize bill pay accounting for both consumers and retailers. Ecommerce merchants will be able to track receipts through an ordinary account the processing becomes much simpler and the opportunities for theft are significantly reduced. The ecommerce retailer/merchant will also be able to expand their market reach in a very simple platform by adopting the Facebook software applications. Complexity in a transaction is a barrier to consumers who may or may not be internet or computer savvy. By scanning a UPC and quickly getting a price with perhaps an internet coupon, the process of buying is expedited. A byproduct of expedited purchasing is an increase in impulse buying. When a consumer is immediately enamored with a product from a website or in a retail store the emotional drivers that override logic and reason can gain in strength leading to a likely measureable increase in sales.
Good business that intends to grow must always find ways to overcome barriers in the market that separates the business from the consumer. Once the currency issues are resolved, the security is installed, and the complexity is eliminated, the opportunity to sell services or products increases exponentially. The question for Facebook is not “Why are they getting into the payment business?” but rather “Why didn’t they get into it sooner?”