Twitter (TWTR) is following some of tech’s biggest players — Apple (AAPL) and Facebook (FB) to name a few — into the world of mobile payments and payment processing.
TWTR is partnering with the French bank Groupe BPCE to allow all French Twitter users — regardless of which bank they use — to send and receive money via tweets. Groupe BPCE is the second-biggest bank in France by customers, and the move should help it to expand its presence.
A Groupe BPCE press release summarized the program, saying:
“Everyone with a bank card and a Twitter account in France will soon be able to send money to other users easily, rapidly, securely and free of charge with a simple Tweet.”
For owners of TWTR stock, this move represents a big step in the right direction, as the social media platform aims to diversify its revenue streams in an effort to boost sales and become profitable. While Twitter’s sales growth has been astronomical — TWTR has doubled or tripled its sales annually since it first reported financial data in 2010 — the company has never been profitable.
Twitter: A Financial Services Company?
The move into online payment processing, where eBay‘s (EBAY) PayPal currently dominates, has already made by FB and Apple, each of which have mobile payment systems of their own. The new Apple Pay service is probably the most well-known, but FB also has a Twitter-esque program called “Transfer by Facebook,” that allows Japan’s Rakuten Bank users send money to their Facebook friends.
Facebook also recently partnered with Anheuser-Busch (BUD) on a Bud Light promotional campaign that lets users send each other vouchers for beers on the social network.
But don’t discount Twitter’s move into the mobile payments arena as a localized program unlikely to make any material difference for TWTR stock. Sure, the Groupe BPCE partnership in and of itself might not drum up hundreds of millions of dollars in sales, but the program is indicative of Twitter’s mindset.
For example, last month TWTR announced it would be launching a “Buy” button on its website. The “Buy” button signifies a bold move into the world of e-commerce and thrusts the company into an uber-competitive landscape dominated largely by retail giants like Amazon (AMZN).
Thankfully for Twitter, it doesn’t even need to be a legitimate competitor to AMZN and PayPal. The payment processing and e-commerce industries are so incredibly large that simply capturing a small percentage of those transactions could totally change TWTR’s revenue streams.
So, don’t laugh at the Twitter-Groupe BPCE partnership, because it looks like an early sign that TWTR can eventually morph into a big player in the future of digital payments.
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As of this writing, John Divine was long AAPL. You can follow him on Twitter at @divinebizkid.
