Social Commerce

Facebook, Shopping And Behavioral Debt

As consumers use a particular platform to perform a specific function, such as posting news or communicating with friends, they build up debt, and the larger the pile of behavioral debt, the harder it is for the user to escape it. Recode argues that changing entrenched consumer behavior is difficult.

This theory explains why consumers might not buy new products offered by a brand that they like, but they may still be loyal to older same-brand products.

Facebook wants to promote its marketplace and payment services so that users will shop without leaving the Facebook platform. This might be a hard sell because consumers are accustomed to using Amazon or other merchants for shopping. Users of Facebook have built up debt while using Facebook for social networking, not shopping.

The concept of behavioral debt can also be applied to mobile payments. A study by Recode showed that in markets where tap-and-pay with physical credit cards has been popular for years, 40 percent of those who are used to that mode of payment still do not pay with their smartphones because they find it easier to tap and pay with their cards. Twenty-five percent forget that they can use their smartphone.

Similarly, many PC users are amazed at what Gen Zers can do with a smartphone. The assumption is often that many tasks can only be done on a PC while those who are free from behavioral debt from a PC are more likely to freely experiment and find new ways to accomplish tasks.

Startups often come up with an innovation that may be quicker or more efficient than established methods, but the innovation may fail because of behavioral debt users have with existing methods. Consumers may not want better and may be more comfortable with the familiar.

Recode suggests that behavior change among consumers is “rare and profound.” Another example from Facebook is video engagement, which Facebook would like to encourage. Currently, approximately the same number of videos are played on Facebook as Snapchat, but Facebook videos do not require a click, unlike Snapchat. But Snapchat users have been playing videos on the platform since its inception, whereas Facebook users have been busy posting photos or sharing posts.

According to Recode, the best way for Facebook to manage behavioral debt among its users, and have them engage in video, is to start afresh and acquire a company like Snapchat, where users are already engaging in the desired behaviors.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The May 2019 AML/KYC Tracker, provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

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