If you have a Twitter Inc (NYSE:TWTR) handle in France as well as a bank account, you will soon be able to make payments to your followers. Facebook has long been rumored to be working on a person-to-person money transfer through its Messenger app. The fact-based speculation began in earnest when Facebook Inc (NASDAQ:FB) hired David Marcus, former chief executive of PayPal. However, Twitter has beaten them to the punch, albeit just in France so far.
Twitter’s innovative payment system
“This initiative is a good example of our innovation strategy regarding payments. Groupe BPCE is the first banking group to offer individuals a payments solution where they can transfer money with a simple tweet,” said Jean-Yves Forel, Groupe BPCE chief executive in charge of commercial banking and insurance.
Twitter’s stock has taken a beating this year and is down 17% while Facebook has gained 35% in the same time frame. Investors in Twitter are clearly worried about Twitter’s ability to find revenue streams outside of advertising. Just last month Twitter launched a “buy” button that allows users to make purchases inside a tweet in conjunction with Stripe, a startup that will handle the payments. The decision to add a “buy” button was announced by Twitter’s head of e-commerce and the former chief executive of Ticketmaster, Nathan Hubbard.
A change is in the air
There is little question that banks are always looking for new ways to make money outside of traditional means and social networks present an excellent opportunity for them. However, traditional financial services companies and banks are seeing increased competition from the tech sector with companies like Prosper and Lending Club building a following in peer-to-peer lending. But with social networks looking to make payments among users a reality, someone has to process them and banks like Groupe BPCE, with today’s announcement, see that.
While Twitter may have beaten Facebook, don’t expect Facebook to sit idly by and let Twitter become to entrenched in exclusivity. Facebook has something in the works and its only a matter of time before they join the fold.