Facebook Goes E-Tail With New Buy Button

By Christine Kern, contributing writer

New buy now button allows customers to discover and buy products without leaving Facebook

Facebook is testing a way to pay for e-commerce purchases from other businesses without leaving its site or app. At least initially, there will be no charge to the few small and medium-sized businesses in the U.S. to test this new Buy button on their News Feed Pages posts and ads, though fees may be built into the structure at a later date.

On its Facebook News page, the company stated that they were beginning to test a new feature to help businesses drive sales through Facebook in News Feed and on Pages. With this feature, people on desktop or mobile can click the “Buy” call-to-action button on ads and Page posts to purchase a product directly from a business, without leaving Facebook.

According to the statement, this feature was designed with privacy in mind, with appropriate steps to help make the payment experience safe and secure. There is no sharing of any of the credit or debit card information people provide to Facebook when completing a transaction, and customers can select whether or not they’d like to save payment information for future purchases.

While the current test is limited to a few small and medium-sized businesses in the U.S., there is potential for this program to be expanded to include larger and more businesses in the future.   

Rather than clicking away to a merchant’s site, the Buy button lets you complete the entire purchase flow within Facebook, which could boost conversion rates and endear retailers to the social network. Customers can use a credit card on file with Facebook, enter new payment details and save them for future use, or just checkout and without storing payment info. 

This is not Facebook’s first venture into e-commerce. In 2012, it tried a Pinterest-style Collections feature with buy buttons that led off-site.  It also enabled on-site payments to charities with its Donate Button, last year. And most recently, it’s been testing an “Auto-Fill With Facebook” feature that automatically enters your payment details when you’re making a purchase in a third-party ecommerce app..

Twitter also recently rolled out a Buy button, indicating its desire to enter the ecommerce transaction game. The method could also be how Pinterest eventually gets deeper into ecommerce.

If successful, the Buy button could eventually be a money maker for Facebook by charging a fee or revenue share in exchange for processing payment and improving conversion rates. There are 30 million active small business pages worldwide.  Facebook could also use the purchases to prove return on investment to advertisers, encouraging them to buy bigger campaigns. Collecting credit card info could also help Facebook with other commerce-related initiatives.

"This represents a tremendous opportunity for savvy small businesses to generate sales in real time," said Brian Solis, principal analyst at Altimeter Group. "This is an opportunity for innovation."

By shaving down the time and effort from interest to purchase, Facebook could get more people plopping down cash for ecommerce purchases. That’s something retailers might be very willing to pay for.

"This could be so incredibly successful if businesses think about it as a new opportunity," said Solis.