#IOU – Twitter enters the payment services market

twitter-money

When Apple launched its latest iPhone in September one of the most talked about features was the Apple Pay service, which will allow iOS users to pay for good and services through their smartphones and has the potential to revolutionise the way we pay for things. And recently it’s been rumoured that Facebook is close to launching a new payment system also that will allow users to transfer money via the social network.

Not one to be left behind, and beating Apple and Facebook to it, Twitter has just launched its own innovative new way to pay for things – by tweeting of course. It’s teamed up with French mobile payment company S-money, a subsidiary of banking group BPCE, (France’s second largest bank), to offer users a new way to send each other money. The service allows anyone with a Twitter account and a bank card to ‘tweet money’ regardless of what bank they use, and without requiring the sender to know the recipient’s banking details.

To make an S-money payment over Twitter, the sender and the recipient must first link their Twitter usernames to their S-money accounts, and the sender must also install the S-money app on their smartphones. After that, it’s as simple as sending a tweet to @SmoneyFR with the hashtag #envoyer (‘send’ in French), the amount in euros and the Twitter username of the recipient.

Although a relatively fun and innovative way to pay, it remains to be seen whether the service will be a success or even expanded outside of France. So far the S-money app has just 100,000 downloads, leaving plenty of room for growth.

In truth, the service isn’t vastly different from the mobile to mobile payment services that have been launched by banks throughout Europe recently. These services allow users to transfer money through their phones by downloading and logging on to the relevant app on their smartphone and then using the recipient’s phone number to send them money, a service which S-money also provides. So what’s the compelling reason to use Twitter?

Since its launch, Twitter’s profitability has lagged behind that of Facebook and other rivals. It’s considered by many to be a ‘niche’ social media network and it still relies heavily on advertising for most of its revenue. Twitter’s success in developing additional services on its platform, as Facebook has done, will be key to its future profitability and industry observers will no doubt be watching the success of this new service closely.

But do social media users really want to use their accounts for anything other than status updates, tweets, looking at photos, and keeping in touch? Can Twitter and Facebook ever hope to be the new eBay or PayPal? Only time will tell…

Last month, Twitter started trials of its other new service, dubbed ‘Twitter Buy’, which enables an initial test number of users to buy products and services directly from their Twitter feeds from various partners such as Burberry and Home Depot. The service embeds a ‘Twitter Buy’ button inside tweets, and is enabled by San Francisco-based start-up Stripe. Twitter is expected to expand the service to more users as well as increase the number of retail partners in the coming months.

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