By Jennifer Acosta, Global Head of Media and Telecom and North America Enterprise Technology, J.P. Morgan Payments
Social commerce has become an integral strategy supporting all global industries.
Companies must constantly evaluate which payments trends are worthwhile enough to implement into their business practices. One area ripe with potential is social commerce, as this allows consumers to do way more than just make purchases on social media. With over half of businesses planning to sell through social networks in 2023 and beyond, businesses cannot afford to miss this trend. Here’s why and how payments plays a key role.
Social Commerce = Social Revolution
Social commerce is revolutionizing today’s culture. The average person spends 2.5 hours a day on social media platforms, and since they’re constantly plugged into this technology, they expect everything, including their shopping experiences, to occur there. Brands are embracing this opportunity for growth by leveraging this business model and having the right platforms, the right types of experiences to convert and expand their consumer base. This includes partnering with relevant creators and influencers who can add a personal touch to promote products and provide reviews helping to build out a brand’s positioning. It can also help to build loyalty with subscription-based models.
Given all of these trends, social commerce is rapidly accelerating. Global sales are anticipated to grow from $492 billion to $1.2 trillion between 2021 and 2025. This growth is causing over half of businesses to sell through social networks in 2023, which means businesses need to evolve how they market, sell and interact with their customers.
Businesses should also keep the trend top-of-mind to expand into other regions. Specifically, Asia-Pacific is experiencing significant growth with the trend. For instance, roughly 30% of people in Vietnam use Facebook to make commerce purchases, and given this popularity, brands in markets like Singapore and Indonesia are spending 30% of their total budget on influencer marketing.
Payment’s role in social commerce
Payments are integral for a company’s social commerce strategy in many ways. One obvious one is to help with the checkout experience. Since people are often casually scrolling through social media, they’re likely to abandon a potential purchase if they experience any friction with checkout. In response, payments can create a seamless experience by solving for the following friction points:
- Friction Point: Redirecting users to a separate page
- Solution: Embedded finance and embedding payments links directly into the posts and ads on the social media page
- Friction Point: Requiring users to input payment information for every new transaction
- Solution: Digital wallets that allow consumers to store preferred payment information to make future ad-hoc or recurring purchases as simple as a few taps.
- Friction Point: Declined payments
- Solution: A payments partner with end to end solutions and a streamline purchasing process to promote higher authorization rates
But payments can do more than support checkout, and one huge opportunity is to support omnichannel experiences. For instance, businesses can use analytics and insights to glean information from a consumer’s purchases across all of their sales channels. Then, businesses can use this information to make curated advertisements and recommendations for consumers on social channels.
Last but not least, payments can help businesses attract and strengthen relationships with influencers. This audience (like other gig workers) wants to quickly access money from sponsorships and brand deals. If businesses can instantly pay influencers for brand deals with real-time payments across countries, it can incentivize creators to work with brands and even create additional revenue streams.
Choosing the right payments partner
Each decade of payments is likely to be more transformational than the next, and choosing the right payments partner is essential in helping businesses build their social commerce payments strategy. A few key attributes to consider when looking for a payments partner: The first is scale, which does more than help businesses to identify emerging trends. It also helps ensure businesses are equipped with a comprehensive suite of payments products. We accept, process, manage and send payments (and more), and we support 160 countries and 120 currencies.
This scale allows us the breadth and depth of expertise to serve as strategic collaborators. For instance, we partnered with L’Oreal to help build their B2B marketplace through supporting various functions such as the management of third-party money, trust and safety services and a platform to pay customers and suppliers. As a payments provider that processes nearly $10 trillion in daily global payment volume, our size allows us a unique viewpoint.
Another important factor is a partner recognized for excellence, both globally and regionally. We’ve been recognized as the number one merchant acquirer in the world. Further, Coalition Greenwich has commended our solutions with Excellence Awards in 25 categories that include overall digital experience, digital platform functionality knowledge of international banking needs and real-time insights and analytics. We’ve also received similar awards in regional categories such as Asia-Pacific and Europe.
The time is now to take advantage of the social commerce trend. To learn more about how we can support your business, please contact your J.P. Morgan representative.