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Instagram launches in-app payments for select brands, which could substantially increase its share of commerce.

What happened

  • For the in-app payments, an extension of Facebook Payments, Instagram allows users to create a profile that includes their debit or credit card information and a security pin. Then, users can make purchases from Instagram’s brand partners without leaving the app.

Why it matters

  • Instagram announced back in 2017 that the it would offer an in-app booking service that allows users to schedule reservations with some companies like Resy, as well as appointments at salons. But at a moment when mobile payments in the U.S. are on the precipice of a great leap forward—12% of mobile transactions in the U.S. are now attributed to Starbucks’ mobile app—native payments on the ever-popular Instagram app have the potential to vastly alter the mobile commerce game.
  • Right now, Instagram’s Shoppable Tags option allows shoppers to click on an image, which automatically moves them off of the app and onto the brand’s webpage. But the in-app payment feature will both allow brands and retailers to meet consumers where they already are, converting more clicks into frictionless sales, as well as boost Instagram’s advertising revenue—even if the app doesn’t (yet) receive a cut of the in-house sales.

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