) are gearing up to expand their e-Commerce offerings. The social
network is testing a 'Buy' button that will allow users to purchase
goods from merchants without leaving the core app. This is much
similar to the 'Buy Now' button that Twitter is reportedly testing.
Twitter is also expanding its e-Commerce infrastructure. The
company is acquiring CardSpring that facilitates connection among
merchants and payment processors. However, the acquisition amount
has not been disclosed.
Facebook is testing the new button with a selected few small and
medium-sized merchants in the United States. Once satisfied, it
will be available to both mobile and desktop users, who can use
their credit cards (registered with Facebook) to purchase goods.
Facebook said that it will not pass on any user transaction details
to advertisers. Users can also opt to not save any information of
the payment transaction on Facebook. Currently, the company will
not charge any fees on the transactions done over the network.
Earlier, Facebook had tried several options to expand its
e-Commerce offerings without much success. The simplicity of the
current payment process will boost conversion rate, which is the
primary aim of every merchant. We believe that a higher conversion
rate will enable Facebook to charge merchants in the long run.
Twitter's acquisition of CardSpring will enable it to offer deals
within its tweets, which users can redeem offline later.
CardSpring's e-Commerce platform links card users' account to
merchants, which helps in tracking user card swipes.
Once a Twitter user swipes a card, the platform applies the
available discount and provide the data to merchants. This data
help merchants to know the effectiveness of online promotions on
offline sales. It will also help them to offer targeted ads that
will drive offline sales.
Although Twitter is not expected to launch real-time shopping any
time soon, the company is well positioned to offer a service
similar to Facebook in the long run. Twitter's partnership with
will help it in this regard.
Per eMarketer, global business-to-consumer (B2C) e-Commerce sales
will increase 20.1% to $1.5 trillion in 2014. This is expected to
hit $2.4 trillion by 2017, which presents a significant growth
opportunity for both Facebook and Twitter.
However, we believe that Facebook will enjoy an upper-hand over
Twitter, at least in the near term, due to its massive user base.
Currently, both Facebook and Twitter carry a Zacks Rank #4
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