Shopify announced on February 9 that it would extend the usage of its Shop Pay tool to the social media apps Facebook and Instagram. The Shop Pay payment gateway saves and encrypts users’ payment information to speed transactions, and works similarly to PayPal payments on shopping apps. Shopify stores that currently use Shop Pay will soon be able to use the tool in their Instagram stores, and Facebook stores will follow a few weeks later.
Up to this point, Shop Pay has been available in Shopify ecommerce stores that sign up for the tool and are eligible for Shopify Payments. These stores can also sign up to have their products featured in the Shop app, which provides consumers with recommendations based on previous shopping and fast checkout with the saved Shop Pay information.
The Shop app and Shop Pay have benefits for ecommerce shoppers and for online stores. The payment tool is nearly 2x as fast as a regular checkout on mobile. Shoppers can choose to pay in full or split their payments. And Shopify offsets delivery carbon emissions, which makes us feel like we’re doing good when we use the app.
Facebook is diversifying revenue and data
Both parties stand to win in this scenario: Shopify signs up more users for its Shop Pay tool, and those shoppers are also likely to use the Shop app to make purchases through Shopify Payments. This is more money in Shopify’s pockets. Neither Shopify nor Facebook has released information on the terms of their deal, but we can expect that Facebook will profit by taking a cut of the payments revenue and will very likely retain the shopping data.
There is at least a minimal amount of data being shared between Facebook/Instagram and Shopify. According to TechCrunch, shoppers will be able to use Shop Pay to pay for items in ecommerce stores within the Instagram or Facebook app. The shoppers will then be able to track shipments through their Shop app as they would for a Shopify purchase.
By combining forces with Shopify, Facebook stands to retain some of the customer data they may otherwise lose due to Apple’s upcoming privacy warning. Perhaps this is a bid to circumvent the privacy warning. If Facebook secures data through Shop Pay, the weight of the privacy disclosure falls largely on Shopify’s Shop app, not on Facebook.