Long seen as a purely promotional vehicle, social media is quickly becoming a means to fulfill the business transaction itself. Never before has a medium offered so much utility for brands as well as immediate gratification for consumers.
In fact, 78% of people say that social media greatly impacts their buying behavior already, with 4 in 10 having made a purchase either online or in the store after sharing or marking an item as a favorite on Twitter, Facebook or Pinterest. Now, a growing number of platforms are ensuring that consumers never even have to leave their networks at all to get what they’re after.
78% of people say social media impacts their buying behavior.
—Invesp
Today, many apps exist specifically for peer-to-peer payments, while this functionality has also been integrated into widely popular platforms such as Facebook, Snapchat and Twitter. So, as “Venmo” becomes to payments what “Google” is to search, here’s what you need to know about the flurry of money transfers happening on social—and how this growing trend could impact your business’ bottom line in the not-so-distant future.
Venmo: Leading the Pack
As a free digital wallet that enables people to send and receive money, Venmo offers a convenient way to split a lunch bill or cab fare, send a roommate half of the rent or lend someone cash.
Available for iOS and Android, Venmo turns transactions into status updates that can be liked or commented on. Users can find friends by granting the app access to their location or Facebook account. Those friends’ transaction activity will then be viewable in a Facebook-like news feed upon launching the app.
The amount of money paid is hidden, but users can still see the memo attached to the payment and to whom it was sent—in effect boosting their social cachet. Meanwhile, user activity is divided into three categories:
- Charges happening nearby
- Charges made by friends
- Charges made by the account owner
Unfortunately, businesses are limited in how they can use the app. Venmo can’t be used to accept payments on a website, collect funds from customers or receive payment for goods from a business provider. That said, there are a couple of ways you can incorporate Venmo into the user experience:
- The Venmo API can be used to allow users to pay each other through your app or website, using their Venmo accounts.
- The Venmo Touch API enables card sharing between apps that are using Braintree to accept credit cards.
Facebook: Testing the Waters
Facebook’s peer-to-peer payment feature enables friends to send or receive money via the Messenger app. All people need to do is add a debit card issued by a US bank to their Facebook account. (Currently, this feature is part of a limited rollout available only to US users.)
The peer-to-peer payment starts out as a conversation within Messenger. To initiate a payment, people simply press the new $ icon and enter an amount. Unlike Venmo, keeping the transaction contained within Messenger prevents it from being a visible social experience.
There also isn’t a clear business angle, since payments in Messenger are limited to friends and family. Anyone sending or receiving money for personal business may lose the option to use the payments feature on Facebook.
Snapchat: Tapping the Fountain of Youth
Created in partnership with Square, Snapcash is a fast and easy way for Snapchat users to exchange money, using the app’s Chat feature.
After adding their debit card information—which is stored securely by Square—people can send cash directly to friends’ bank accounts. The steps are simple:
- Swipe into Chat.
- Type a $, and add a dollar amount (e.g., $5).
- Hit the green Snapcash button.
Many businesses may be eager to reach Snapchat’s younger demographic. Unfortunately, Snapcash is a peer-to-peer payment system and can’t be used for any commercial purpose. It also can’t be used to buy, sell or offer compensation for Snaps or Stories, usernames or adding someone as a friend.
Twitter: Introducing the Buy Button
Twitter has a long history with ecommerce support, but more recently, it began testing In-Tweet Purchases, a feature that enables buyers to complete transactions directly from a Tweet.
The biggest differentiator that sets it apart from other services: It’s actually designed with businesses in mind. Certain items from sellers—such as Burberry and The Home Depot—are available for purchase within Twitter’s timeline. Those products will include a Buy button.
To make a purchase, people simply need to:
- Tap the Buy button within the Tweet.
- Choose details (e.g., size and color), and tap Buy Now.
- Enter billing and shipping information.
- Tap Confirm.
The order will be sent to the seller, who then needs to reach out directly with shipping and support information. In-Tweet purchasing is available only to US-based Twitter users through the iPhone and Android apps.
ChangeTip: Leveraging Virtual Currency
ChangeTip lets people use Bitcoin—a type of digital currency—to send and receive money through social media and other web services. Money can be sent and spent anywhere Bitcoin is accepted. ChangeTip is currently used to send or accept donations, tips, gifts, payments and rewards on the following platforms:
- Google+
- YouTube
- Tumblr
- Github
- Slack
- Twitch
- Disqus
- SoundCloud
- StockTwits
When people are browsing through content and see something tip worthy, all they have to do is mention ChangeTip and an amount—they can either mention currency or a moniker. ChangeTip takes care of the rest of the transaction.
Micro-transactions make it easier for people to reward great work and people, peer to peer, without worrying about bank accounts or transaction fees. Right now, the maximum tip is $25, but it can be raised by contacting the service directly.
Cash in Now?
Mobile money transfers are expected to increase by nearly 150% in 2015.
—Juniper Research
One of the biggest ways social payments benefit marketers is that they keep users on the platform, which is especially important for Facebook and Twitter advertisers. Another advantage is that people are in the buying mindset while on the platform. The barrier to influencing their purchase decisions is lower, and the risk of them dropping out decreases since there’s less time between discovery and purchase.
“It could make a marketer’s life easier due to the fact that it could reduce drop-off rates and create a simpler buying process,” said Simon Ensor, Managing Director of the Yellowball digital marketing agency. “There will be an opportunity for early adopters to showcase their ability to market products effectively via social without having to redirect the user to another website.”
Meanwhile, Juniper Research expects the number of mobile money transfers to increase by nearly 150% in 2015 to more than 13 billion. With that in mind, keep an eye on peer-to-peer payments through social media and start thinking about what this promising trend could mean for your business.
The post From Venmo to ChangeTip, a Quick Guide to Money Transfers on Social appeared first on Sprout Social.
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