Meta is moving to bring more ecommerce transactions onto the platform by discontinuing support for offsite checkout in Facebook and Instagram Shops.
New US Shops will only be able to onboard with onsite checkout starting in June 2023 and existing Shops that direct users to an external ecommerce site will have until April 24, 2024 to transition to Facebook and Instagram checkout.
Some international locations have been exempted (for now) and will be allowed to continue linking products to direct ecommerce websites.
The decision was spun as necessary to support new advertising capabilities in a company blog post announcing the change.
To help businesses drive sales during the current economic downturn, we’re investing in AI and automation tools that can improve campaign performance through Shops ads and our Meta Advantage suite.
This year, we will:
- Introduce Shops ads to thousands of new US businesses to make it easier for people to purchase directly from ads, either in our apps or on a business’ website
- Move Shops ads under our Advantage portfolio, so all our ad automation tools can be found in one place
- Make it easier for US businesses to set up a Shop with in-app checkout so people can complete a purchase on Facebook or Instagram in just a few taps; and
- Test new Shops tools like ratings and reviews, buyer email opt-in, and dynamic product pages to give businesses more ways to connect with customers and promote their products
To focus on bringing these Shops ads and checkout tools to more businesses, we will no longer support Shops without checkout in several markets. Businesses in these markets can continue to connect with customers through personalized ads, Reels and business messaging.
- In the US, we will focus on helping businesses add checkout to their Shop. To ease the transition, we will continue to support Shops that link to a website until April 24, 2024.
- In select markets where we see a future opportunity to introduce checkout, we’ll continue to support Shops that link to a website to make the transition as easy as possible.
- All other markets will no longer be able to host a Shop on their Facebook or Instagram page or use product tagging in posts beginning on August 10, 2023.
With these changes, we can learn what works best for people and businesses in the US before expanding this suite of tools to more countries.
More information was provided in the Facebook Business help section.
US - onboarding of new shops will only be with checkout on Facebook and Instagram enabled
We will be phasing out onboarding of new shops without checkout on Facebook and Instagram enabled.
Beginning June 5, 2023:
Onboarding of new shops via Commerce Manager and Shopify will only be with checkout on Facebook and Instagram enabled.
By Aug 10, 2023:
- Onboarding of new shops via all other partners will only be with checkout on Facebook and Instagram enabled.
- US - support for shops without checkout on Facebook and Instagram enabled will end
Beginning April 24, 2024:
- Shops without checkout on Facebook and Instagram enabled will no longer be accessible i.e. shops that direct people to an ecommerce site to complete a purchase, rather than allowing people to make a purchase directly through Facebook or Instagram, or shops with checkout on messaging.
- Businesses without checkout-enabled shops will no longer be able to use features associated with shops including organic product tagging in posts and creating new custom/lookalike audiences derived from people who visited a shop.
- Exceptions will be granted for omnichannel and subscription businesses
21 international markets - businesses may continue using shops without checkout on Facebook and Instagram enabled
- Businesses located in 21 international markets will continue to be able to use Facebook and Instagram shops without checkout enabled until further notice
- These markets include: Australia, Brazil, Canada, Denmark, France, Germany, India, Indonesia, Italy, Japan, Mexico, Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, UK and Ukraine
- Beginning this summer for users located in EEA, UK or Switzerland the Shops experience will evolve to be more focused on driving product discovery through PDP, product tagging on organic posts, ads with product tags, and conversion on a business’ website. Certain features, like Storefront, Wishlist and Collections, will no longer be accessible to Shops users based in these markets to support this new simplified and streamlined experience.
In Rest of World - support for shops without checkout on Facebook and Instagram enabled will end
Beginning Aug 10, 2023:
- Businesses will no longer be able to host a shop on their Facebook or Instagram page, unless the shop has checkout on Facebook and Instagram enabled in the US
- Businesses without an accessible shop will no longer be able to use features associated with Shops including product tagging (in posts, Reels, or Stories), and creating new custom/lookalike audiences derived from people who visited a shop.
- On Instagram, ads with product tags will continue to be available as a solution to enable new and existing customers to discover your products at scale via an experience that is independent of Shops. Businesses actively leveraging ads with product tags do not need to take any action and their campaigns will continue uninterrupted
Meta is also finally really ending their fee waiver for items sold through Facebook and Instagram checkout , after having extended it multiple times since 2021.
However, instead of going ahead with the 5% selling fee they had originally announced, they will only be charging a payment processing fee, which will include the item price, shipping, and sales tax in the calculation.
The 5% Selling Fee for transactions on Facebook and Instagram Shops checkout is waived through June 30, 2023. Starting July 1, 2023, Meta will remove this Selling Fee and charge a standard processing fee, only intended to cover processing costs. For Shopify merchants you will be charged payment processing fees by Shopify directly.
Sellers who have onboarded to Shops via the Facebook and Instagram app on Shopify
If you have a Shopify account that is connected to Facebook, you will be the charged the processing fee by Shopify directly for your Meta onsite orders:
- If you’re a Shopify merchant, your orders on Meta are processed using Shopify Payments.
- If you use Shopify Payments for your online store, you’ll be charged the same amount as your online store by Shopify directly.
- If you are using Shop Pay for third-party gateways via Shopify, this change will not impact your website’s processor or web order fees. You will be charged by Shopify directly for your Meta onsite orders.
Sellers who have onboarded to Shops via Commerce Manager
If you onboarded to Shops in Commerce Manager, when you make a sale, we deduct a fee from your payout automatically. We call this a processing fee. You keep the rest of your earnings. Please see rate table below:
Here’s an example to better illustrate how we would apply the 2.9% card processing fee to your sales on a card transaction:
If the card total transaction cost is $10.00 USD (including the total sale price, any shipping fees and applicable taxes such as sales tax), we'll deduct $0.29 for the processing fee. Your payout will be $9.71 USD.
Meta’s processing fee
- Is calculated as a percentage of the total transaction amount, including any taxes, surcharges, shipping or state mandated fees applied to the transaction.
- Includes the cost of payment processing.
- Applies to all checkout transactions for all product categories on Facebook and Instagram Shops.
- Is subject to any applicable taxes and fees.
It's interesting that Facebook has decided to split the middle here by covering payment processing costs, but backing down on the full 5% fee.
The company has recently undertaken layoffs and cost cutting measures as part of what they have dubbed the "year of efficiency", which may account for internal pressure to at least cover some of the payment processing and admin costs of Shops checkout, but they are also still trying to win sellers over to the platform by keeping fees lower than other venues.
Will these changes to Facebook and Instagram Shops impact your business? Let us know in the comments below!