Apple Swamps Twitter’s Buy Button

Believe it or not, companies other than Apple Inc. are doing new things in electronic payments nowadays. Just a day before the Sept. 9 mega-event at which Apple unveiled its iPhone 6, Apple Pay service, and Apple Watch (“Can Apple Save Mobile Wallets?”), Twitter Inc. disclosed it was starting a test allowing members to make purchases via tweets from 28 partners that include merchants, rock bands, and non-profits.

Twitter’s news got some play but was almost an afterthought a day later thanks to Apple and the easily distractable media. But it’s worth a second look because of consistent speculation that the social network has payments ambitions.

“For a small percentage of U.S. users (that will grow over time), some tweets from our test partners will feature a Buy button, letting you buy directly from the tweet,” says a blog post from Tarun Jain, group product manager at San Francisco-based Twitter. “This is an early step in our building functionality into Twitter to make shopping from mobile devices convenient and easy, hopefully even fun.”

Twitter’s test comes just over a year after it hired Nathan Hubbard, the former president of Ticketmaster, as its first head of commerce. In July, Twitter struck a deal to buy CardSpring Inc., a payments-infrastructure company that works with digital publishers and retailers.

In the new test, users will get access to offers and merchandise they can’t get anywhere else, according to Jain, and can act on them in Twitter’s apps for Android and iOS mobile devices. Sellers “will gain a new way to turn the direct relationship they build with their followers into sales,” Jain said.

After tapping the Buy button, the purchaser will get additional product details and be prompted to enter shipping and payment information. Upon confirmation, order information is sent to the merchant for delivery. Payment and shipping information will be encrypted and stored, sparing the customer from having to re-enter it for subsequent purchases, according to Jain.

Twitter’s test partners include retailers Burberry and The Home Depot, bands and musicians such as Megadeth, Eminem, and Panic! At the Disco; and some non-profits and community organizations, including The Nature Conservancy and the Global Poverty Project’s Global Citizen.

Twitter initially is using four platform providers to process transactions: Stripe Inc.; Thing Daemon Inc.’s Fancy luxury-goods marketplace; Gumroad Inc., an online market for writers, software developers, and the arts community; and Musictoday, a marketing, ticketing, and fulfillment service for musicians and music sellers. Twitter will be adding more platforms, according to Jain.

Twitter makes most of its money on advertising “but would also like to make money on selling, which could potentially yield even more value,” mobile-payments researcher Rick Oglesby, senior analyst at Centennial, Colo.-based Double Diamond Payments Research, says by email. To do this, Twitter will need to ensure “absolutely security” while also making the checkout experience as fast and simple as possible because its audience is used to reading and writing in short bursts, he says.

“Security and convenience are often antonyms, so that’s always a big challenge and will be even more of a challenge in the Twitterverse, where people scan through lots of information on various topics and therefore don’t have a lot of patience,” says Oglesby.

—Jim Daly