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Facebook Messenger’s future in mobile commerce could close conversion gap

Facebook continues to position its Messenger application as a one-stop destination for users, with a new code integration suggesting a future as a mobile wallet, a move that could address the issue of low conversion rates.

Code built into Facebook Messenger implies that the app wants to provide more services as messaging apps become increasingly popular. Messenger could accept digital transactions in the future for in-store and online shopping, which might be a big opportunity for retailers, as mobile conversion rates have been slow to take off.

“I believe Facebook is positioning Messenger as an app platform and modeling it very much like Tencent’s WeChat in China,” said Mark Beccue, principal analyst at Mark Beccue Consulting Inc. “I believe the vast majority of standalone mobile apps will fade away.

“Messaging apps are commanding the majority of consumer engagement on mobile, so as consumers spend less time in stand alone apps, messaging apps become platforms from which other apps can integrate,” he said. “That way a consumer does not have to leave their primary app of choice, messaging, to do something else.”

One-stop app
With so many consumers interested in comprehensive apps in which they can accomplish more than one task, rather than having multiple apps for numerous actions, Facebook might have real opportunity. A new software update will allow users to purchase items through the Messenger app for delivery or also order, pay and pick up in store.

The platform will likely piggyback on other mobile payments solutions such as Apple Pay and PayPal by allowing use of these solutions at checkout. However, a Messenger wallet also has the potential to challenge a wide range of payments methods, such as in-store point of sales systems.

“It is not a solution looking for a problem, it actually solves a real problem, ecommerce conversion,” Mr. Beccue said. “It also eliminates the barriers in the U.S. for mobile physical payments, merchant POS, etc.

“It makes everything an online payment,” he said. “Merchants will need to accept online payments to participate.”

Mobile conversions
While mobile traffic has been a real driver for publications and retailers, bringing these numbers to actual sales has been a trouble area for them. There has been a slight uptick in conversion rates, but compared to other sectors of retail, mobile is slow on the draw.

Facebook’s new commerce venture might be able to close the gap between traffic and conversion. Offering a conversational experience to help with shopping information and recommendations that also allows users to purchase directly within the app, without having to navigate away, can be a huge sales driver.

“Facebook is working to make the experience as seamless as possible,” Mr. Beccue said. “To attract ecommerce businesses to integrate to Messenger, they are pitching them on frictionless conversion, if you integrate to us, we will be able to enable payments seamlessly for your customer, less cart abandon, etc. since customers do not have to jump through a lot of hoops.

“I think Facebook will set up their payments play similar to iTunes, Facebook Messenger users will be asked to link a payment card to their Facebook Messenger account, asked, not forced,” he said. “This will enable seamless transactions for businesses and consumers on Messenger.”