Major platforms on the Internet like Google and Facebook have depended for years on advertising revenue from companies buying space on the pages displayed to users. As companies continue to squeeze the sales channel in a never-ending quest for revenue, the issue of conversion between a customer finding an ad for something they want to buy and actually making a purchase is receiving a lot of attention. Google has already indicated they are working on improving their shopping experience. Now it appears Facebook is also working on the problem and has started testing a new Buy button that will work within their site.
Normally, when a Facebook user is presented with an ad or a suggested post from a vendor on Facebook, to make the purchase the user has to click on the post to be taken to the vendor's site, leaving the Facebook site in the process. The new Buy button will let users complete a transaction from within Facebook.
According to Facebook, the new service also eliminates another pain point for customers, entering payment information. Users will have the option to save credit card information with Facebook and that information can quickly be passed on to the vendor, similar to making a payment in the Google Play Store. For users wary of storing financial information with Facebook, they can still do one time payments while still within the Facebook framework without information being saved by Facebook.
Besides making the whole buying experience much smoother and hopefully increasing conversion rates, justifying the ad dollars being spent by companies on Facebook advertising, Facebook also stands to create a new revenue source for themselves by taking a small cut of each sale for facilitating the transaction or charging a standard fee for companies that want to use the Buy button. This also means users could spend even more time on Facebook.
source: TechCrunch
