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Twitter and Facebook Branch Out to E-commerce

Mobile Commerce Insider Featured Article

July 22, 2014

Twitter and Facebook Branch Out to E-commerce

By Clayton Hamshar
Contributing Writer

Social media has been omnipresent for several years, and major players Facebook and Twitter (News - Alert) are taking steps to incorporate e-commerce and expand the functionality and definitive boundaries of social networks.

Last week Twitter announced its acquisition of CardSpring, a payments infrastructure company that allows merchants to offer deals such as coupons, rewards, and loyalty programs, which can then be loaded on a user’s credit card. When the card is then used at the store the promotion is automatically applied during the purchase. This is similar to a service already offered to American Express (News - Alert) cardholders, resulting from a deal between the credit company and Twitter for the past couple years, but the incorporation of CardSpring will vastly expand that capability.

Twitter has hinted at branching out even further, mysteriously blogging, “We’ll have more information on our commerce direction in the future.” There is little reason not to believe that this could refer to full-fledged online purchases being available through Twitter, using the same concept of credit card information storage. The option to carry out transactions within the social network platform would be a logical evolution, considering the potential benefits for businesses and consumers.

Facebook (News - Alert) is much braver about this process and, although they don’t have a credit card-linked promotional program like the one gaining popularity on Twitter, they have already begun testing support for purchases within the social network. A select few small and midsize businesses now feature posts and ads that include a “Buy” button which, when clicked, pops up with a dialog box that allows the user to input payment information.

The credit card information is transferred to a third-party payments processor to maintain adequate security, but users do have the option to save their info onto Facebook’s servers to speed up the process of future purchases. The company has clarified the point that none of that information, at any time, will be shared with advertisers or third parties other than the payments processor.

These are the next steps for Twitter and Facebook in an evolving process of transactions being integrated into social media, dubbed social commerce. Twitter, thanks to a deal with Amazon, rolled out a feature in May that allows users to click on a link in a tweet which automatically adds the product to their shopping cart. It is still necessary to make the purchase through the Amazon website, though. Facebook for a long time has had an infrastructure for purchasing gift cards for friends’ birthdays, as well as carrying out transactions for in-game purchases.

The social media giants, and presumably other social networks that follow, will face challenges shifting commerce onto a social platform. Businesses must develop new approaches to succeed within this paradigm and eventually capture more than just impulse buyers.

Edited by Adam Brandt

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