Now US Users Can Spend Their Money Directly on Instagram

| Updated
by Bhushan Akolkar · 3 min read
Now US Users Can Spend Their Money Directly on Instagram
Photo: Instagram Info Center

Instagram brings a new in-app checkout feature allowing users to shop products without leaving the app. This way Instagram plans to reduce traffic leakage and tap into users’ impulsive buying behavior.

On Tuesday, March 19, Facebook’s photo-sharing app Instagram took a step to provide its users with an end-to-end shopping experience. Making the shopping experience more convenient, Instagram launched in-app purchase feature.

For now, the feature is only available to U.S-based Instagram users allowing shoppers to make purchases from 20 selected brands. Some of these brands include  H&M, Warby Parker, Adidas, Zara, Uniqlo, Revolve, Kylie Cosmetics and MAC Cosmetics. Instagram says that it will be adding more apps in the coming months.

Facebook-owned Instagram has turned out to be the most popular app for people to check out the latest fashion trends. Also, the company has been new tools to make users’ shopping experience better. For e.g. Instagram allows brands to add shopping tags to their photos giving users more details regarding the products. Furthermore, Instagram stats reveal that nearly 130 million users clicked on the shopping tags every month.

The company said: “Since our earliest days, people on Instagram have loved to shop. Instagram is a place for people to treat themselves with inspiration, not a place to tax themselves with errands.”

Making the Most of Users’ Impulsive Buying Behavior

With the integration of in-app checkout and purchases, Instagram wants to help brands to make the most of users’ impulsive buying behaviors. Also, the in-app checkout feature will help users to store payment information while making quick and instant purchases.

All the items eligible of in-app checkouts carry a blue “Checkout on Instagram” button beneath them. Thus, tapping it, users just need to provide the email address for the seller to complete the order. Thereon, one can add the delivery information and also review the details just before placing the order.

Earlier, completing a purchase required the user to go to the brand’s website through a pop-out window. Thus, forcing people to leave the platform resulted in a big drop in traffic with users abandoning the shopping carts in frustration.

Anindya Ghose, a professor at NYU’s Stern School, notes that Instagram’s in-app checkout feature allows users to “act on that impulse [to buy] right away.”

“Enabling the entire transaction to occur within the same interface without going outside [the app] may not sound like a big deal, but that’s when most of the [traffic] leakage happens,” said Ghose.

With this new feature, Instagram looks forward to tapping a massive business opportunity here. Also, the company believes that the in-app checkout feature shall inspire people to shop more.

 “Checkout is just one part of our long-term investment in shopping,” Instagram said in a blog post. “We’re excited to introduce even more ways for people to enjoy shopping on Instagram this year.”

This might just be the first step with the company long-term plan to integrate crypto payments within the app. To fund this feature, Instagram is likely to introduce a “selling fee”. However, it plans to offset other related expenses like payment processing. Instagram has formed a partnership with PayPal to process and secure the payments.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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