If you live in France, there's a good chance you'll soon be able to send money to your friends via Twitter (NYSE:TWTR)... and everyone will know about it. Groupe BPCE, France's second largest bank by customer base, is working with Twitter's platform to enable its customers to send money electronically with a tweet. To be clear, it's not a partnership with Twitter; just a third-party use of Twitter's application programming interface, which has allowed companies like Starbucks and Amazon to enable actions on their own sites through Twitter hashtags.
Groupe BPCE is capitalizing on the growing trend of social commerce with Twitter and Facebook (NASDAQ:FB) both rolling out "buy" buttons. eBay's (NASDAQ:EBAY) PayPal bought mobile commerce start-up Braintree last year, which includes its popular Venmo app for sending money to friends. But this implementation may be the worst version of peer-to-peer payment ever.
Twitter's killer features will kill this idea
Twitter prides itself on being a real-time information network. To that end, almost all of the content its users publish is public -- you don't even need a Twitter account to view it. One of Twitter's best features is its search engine, which allows visitors to search for a topic or hashtag they're interested in getting some "real-time information" about. The search feature is so good, I'm surprised Facebook hasn't copied it yet.
Groupe BPCE's pay-by-tweet takes advantage of hashtags -- specifically "#send" and "#TweetezPayez." That means anyone can search for "#TweetezPayez" and see which accounts are sending money to others. That makes for an easy list of targets for phishing and hacking operations -- which becomes much more dangerous when payment information is linked to the account, and accessing money is so easy.
Twitter has another great feature called Direct Message. It's the optimal way to send information to someone when you don't want everyone to see it -- for example, with a personal email address. The key to Direct Messages is that both users have to follow each other before they can send a message to one another, which adds an extra layer of security. If Twitter enters the peer-to-peer payments market on its own, it would make sense to use the more secure messaging feature built into the platform. Groupe BPCE won't be using it, unfortunately.
Beating Facebook to the punch
This summer, both Facebook and Twitter rolled out "buy" buttons, which allow users to make purchases directly from the social network websites. Facebook also hired former PayPal President to lead its mobile messaging initiative, and it could clearly use his payments expertise.
On Facebook's second-quarter conference call, Mark Zuckerberg mentioned that he intends payments and Messenger to "overlap." He also said, "We're going to take time to do this in the way that we think that's going to be right over multiple years." Facebook is laying a lot of groundwork now in order to create a better product when it's ready to roll out payments.
Still, it looks like payments in Messenger could be here sooner than Zuckerberg led us to believe. A recent leak of a screenshot taken with the iOS app exploration tool Cycript shows Facebook has already built payments into Messenger; it just has to turn on the feature.
PayPal/Braintree's Venmo is already very popular for sending money to friends via mobile. But you probably only send your friends money a few times a month, so requiring a dedicated app for it isn't ideal. Building a payments feature into Facebook or Twitter may attract a larger audience than Venmo, and cut into its current user base.
Creating the ecosystem
Groupe BPCE's pay-by-tweet system has a big flaw, but Twitter can step in and fix it. If Twitter decides to roll out its own more-secure payments system, it could help convert its unique visitors into active users -- valuable users with payment information attached. Moreover, offering multiple uses for payment information -- buy button, peer-to-peer -- makes it more likely that a user will sign up for one, then end up using both.
There's a lot of potential for Twitter in peer-to-peer payments, but the French bank Groupe BPCE's iteration doesn't look good.