E-commerce and embedded payments continue to gain popularity as millennials and Gen Z consumers look to social media for shopping experiences — and banks must meet their customers where they are shopping online.
“Facebook, Instagram, TikTok users — 50% of them say they will make a social media purchase in 2023,” Allie Chafey, innovation senior account executive in U.S. sales at Visa, said Tuesday at CBA Live in Las Vegas.
There are about 60 million digital commerce users on Facebook alone, Chafey said. “Bank customers are likely engaging through all of these different platforms, so [banks] need to be thinking differently, not only about how to design your own mobile app and your own banking experience, but how to go where your customers are organically shopping.”
In fact, the banking experience is so important to bank clients that one in three users younger than 40 said they have switched banks for a better mobile experience, according to the “Bank of the Future” report published in December.
Embedded commerce opportunity
When completing purchases through social channels, consumers are looking for a seamless, embedded experience through card-on-file offerings, similar to how Amazon’s “buy now” capabilities or Uber payments, which happen effortlessly, Chafey said.
“Making sure that we’re introducing seamless experiences in critical,” she said. “Once I see a product that I know I like, how can I quickly move to purchase without having to manually enter information?”
This is what banks need to consider, Chafey added.
Friction in e-commerce payments leads to abandoned transactions, she said, noting that 20% of customers abandon an online transaction when the checkout process is too long.
Consumers are accustomed to making purchases through social channels and banks need to recognize the “growing opportunity of embedded commerce,” Chafey said.
