Can PayPal give Instagram the edge in contextual commerce?
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Can PayPal give Instagram the edge in contextual commerce?

Facebook-owned social media site Instagram, the photo-focussed platform where millennials use various filters to make their images of food, makeup, landscapes, and themselves even easier on the eye, is branching out into contextual commerce.

What, I hear you ask, is contextual commerce? Basically, exactly what it sounds like. Here’s an example: if you’re watching a makeup tutorial online, and you have the opportunity to buy the items featured at the same time, then that is contextual commerce. If you’ve ever used Instagram, the potential will be obvious – and the company is partnering with an Ecommerce expert to deliver on that potential: online payments giant PayPal.

PayPal and Facebook have both seen their share prices appreciate dramatically year to date

22 03 paypal

Source: Yahoo Finance

Instagram’s “new checkout feature” will make it easier to purchase the shoes, fashion accessories, and more that users are looking at while they’re actually looking at them. The company is hoping this ecommerce equivalent of browsing high class fashion boutiques and more will translate into a service that users love. In a statement, the company said:

“Instagram is a place for people to treat themselves with inspiration, not a place to tax themselves with errands. It’s a place to experience the pleasure of shopping versus the chore of buying.”

PayPal is using its “full-stack processing platform, called PayPal for Partners (PP)” to help Instagram achieve its goals. PayPal’s executive vice president and chief operating officer, Bill Ready, explained how the service works:

“Checkout on Instagram, which will be available within posts and stories with shopping stickers and tags, enables Instagram users in the U.S. to buy, track and manage their purchases directly within Instagram, and allows businesses to sell directly on Instagram without the buyer having to change contexts. After discovering a checkout-enabled product, shoppers will see the option to ‘Checkout on Instagram’ when they tap to view additional details.”

Contextual commerce is on the rise, and it’s a perfect partner for social media. According to industry publication PYMTS’ Contextual Commerce Report, 81% of contextual commerce consumers have made some purchases on social media platforms. That’s likely to increase – and, with PayPal powering its ecommerce process, Instagram might just be the perfect platform to capture this new customer preference.


Dominion holds both PayPal and Facebook, the parent company of Instagram, in its Global Trends Ecommerce Fund.

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