Checkout feature on Facebook and Instagram lets a user complete their purchases from any seller without having to leave the app (Facebook/Instagram). This enables the user to discover and close the purchase on the same platform. It also translates to faster payment processing and checkout process since the various user and payment details are stored by the app. The Checkout feature is live only in the US currently. Facebook has collaborated with multiple ecommerce retailers (e.g., Shopify, BigCommerce, etc.), so that an existing seller in those retailers, can directly list their inventory on Facebook shops. This provides a seller with a convenient way to access the huge user base of Facebook. Facebook makes money by charging a seller fee of 5% of shipment value (for shipments of US$8 or more).
Instagram Checkout was launched in the US in Mar-2019 and the beta phase involved 26 brands (including Nike, Adidas, Dior, H&M, Prada, etc.). Instagram has replaced the process where users were redirected to the brand website with a complete in-app ordering process, including payments. Further, the user can track status of an order, and has the option to cancel or initiate a return, thereby creating the whole e-commerce ecosystem within the app itself.
