According to the recent news, Instagram is not just a social network anymore. With the help of Facebook, it has become a payment system. Read the review to find out more.
Instagram is Snapping at PayPal’s Heels: a New Feature of the Social Media Giant is Rolling Out
Online payments have taken our life to a new level, in terms of safety, сonvenience, and reliability. The advent of e-Wallets has brought about various online commercial businesses. It became far easier to shop, book a table in a restaurant, or rent a room in a hotel. In a matter of seconds, you can transfer money to your relatives, pay your bills, or anything.
Shortly about PayPal
PayPal was the first company in the market that implemented person-to-person (P2P) transactions. Over the course of time, it has become one of the largest online payment companies in the world. Speaking about the benefits of PayPal, there are many of them:
- It allows you to send money across the globe, from any place in the world;
- PayPal is easy to use – transferring funds is simple and quick;
- It’s safe – SSL encryption and other protective programs took care of that;
- The ability to exchange currencies;
- 24/7 availability;
Instagram is Bursting into the Online Payment Market
PayPal’s revenue is rising year by year, amounting to 13.09 billion U.S. dollars in 2017 (in comparison with 2016, it was $10.84 billion). Overall, it seems that there is nothing that can bring a halt to the company’s growth. Instagram has a contrary view. A few weeks ago, Facebook rolled out payments on Instagram, to a limited group of people. The selected audience was given a chance to be the first to try out the new feature of the social media giant. At first glance, the list of available operations is rather unimpressive: the people can pay for products and services advertised on Instagram. But the latter feature can turn the world upside down. If you want to buy the thing on Instagram, you just press one button. It won’t transfer you to the shop’s website, nor ask you for any additional confirmation. It’s easy, fast, and reliable.
Instagram has made an excellent marketing move. By implementing this feature, it will gain even more advertisements than it has now. And what is going to happen to PayPal, which has greatly benefited from the growth of mobile commerce in recent years? Facebook can provide a much better seamless experience and pricing for commercial adds on Instagram than PayPal.
How Facebook’s Payments System Works?
By answering the analysts question about payments across Facebook’s apps, Mark Zuckerberg said: “In general, our strategy is to offer those services at cost, and make it so that businesses can bid what it is worth to them to run ads in the system.” It becomes obvious that Facebook treats online payments as an additional value to its advertising business.
Facebook connects payments with advertisements, thereby encouraging those who make spontaneous decisions. More and more people start buying products, which leads to advertising distributors receiving more revenue. Meanwhile, the company increases the price for its service, thus boosting the profit. Everybody benefits from it.
Instagram is becoming even more popular than it was before. According to the recent research, users spend over 27 minutes per day on the social network. It seems that, with the introduction of the native payment system, Instagram will become an integral part of modern society. It’s highly likely that it will overshadow online payment systems like PayPal, which appears to be slower and consumes more time than Facebook’s payment system.