The best time to get someone to buy something is when they're actually discussing buying it, according to Teamchat CEO Beerud Sheth.
To turn these conversations into sales, e-commerce merchants are rapidly adding support for buy buttons to their online and mobile storefronts. The idea is to bring the purchase closer to the research and shopping experience.
"Buyers are talking to sellers, or talking to friends or other buyers, or you have senders speaking to buyers," said Sheth, whose company has developed a chat program that integrates with e-commerce sites and buy buttons, enabling a purchase function within an automated conversation. "You want to provide the ability to make a payment right there."
Particularly on smartphones, the widespread use of social media is taking over other consumer habits. Social networking benefits from both the connected nature of the smartphone and the limited ways users have to interact with it.
"With the small screen of the mobile device, chat is one of the functions that has really taken off," said Sheth. "An invoice or a shipping card can be inserted right into the chat."
Teamchat has developed what it calls 'chatlets,' or technology that can summarize and organize message replies to remove the clutter from conversations to determine which product is being discussed. It also has an application programming interface to build bots, or programs that merchants use to send and receive messages. Based on programming logic, these merchants can also create or manage workflows within chat programs for marketing, CRM and payments. The technology also has other corporate uses, such as HR, sales and employee management.
In e-commerce, this technology allows users to set up a debit or credit card with a participating merchant, and have the option to make a payment within a "smart" chat that involves the merchant's messaging bot, Sheth said.
"The conversation with the merchant will include a message that says something like 'here's the deal' or 'here's the offer' and you can make a payment right then and there," he said.
Chat-based payments are not an entirely new concept, but are a fast-growing one, particularly among the dominant social networks. Facebook's Messenger business is led by former PayPal president David Marcus; and Google has blended its Google Wallet system with Gmail, making it possible to send money through the same interface used for email attachments.
Similarly, payment-focused apps like Venmo are designed from the ground up to function like a social media feed, enabling conversations around each payment sent or requested.
Other social media companies such as Pinterest, Twitter and Snapchat are quickly adding payment capabilities to their own content feeds.
"Chat definitely adds an element to in-app purchases and buy buttons," said Rick Oglesby, a senior analyst and consultant at Double Diamond Group. "Online shopping enables consumers to switch between competitors in an instant, so online sellers need to make it very easy for their consumers to buy."
If anything causes a buyer to switch to a different app or to a different website, the sale is likely to be lost, Oglesby said.
"Facilitating ease of checkout via easy to use buy buttons is critical, but so is facilitating easy service," Oglesby said. "This means servicing the consumer quickly and conveniently, and within channel…as mobile commerce grows that means catering to the communication styles of the mobile consumer which right now means via chat."