Twitter Also Considered PayPal For Its Square-Market Competitor

Twitter, now a listed company with more public accountability for how it makes money, has put the bulk of its chips down on generating revenue from advertising. But another area it appears to be exploring is commerce — using its platform not just to help spread the word about brands, but to help people buy from them, too.

Earlier today, Recode published a story about how Twitter is working on a commerce platform. It’s something that we have heard about for a while, too, along with a few more details:

Twitter is looking at building a marketplace on its platform that is similar to what Square offers in the Square Market, with listings for goods across different categories. “They’re working on a concept similar to Square,” is how one source described it. (Yes, the same Square where Twitter’s chairman Jack Dorsey is the CEO. But to be fair, it doesn’t sound like it would compete; just that this is a model for it.)

It’s not completely clear, but it sounds like marketplace may exist in a standalone format but also on Twitter’s main river. “They want to partner with bigger retailers and have check out cards on the platform, instead of just hashtag commerce,” said another source.

Hashtag commerce is a reference to some of the efforts that have existed on Twitter up to now, which use hashtags to trigger purchases (as pioneered by companies like Chirpify) or discounts (as it did with American Express in February 2013).

From what we understand, Twitter would provide the “storefront” for the service, as it were, but not the commerce backend.

“They say they don’t want to handle the whole commerce side of things,” is how one source put it to us. Recode reports that Twitter has been talking to Stripe. We have heard that, too, along with another major player in payment processing: PayPal. It’s not clear if PayPal is still in the picture. Neither Stripe nor PayPal, nor Twitter, returned requests for comment.

Along with ex-Ticketmaster CEO Nathan Hubbard, who was named head of commerce at Twitter in August, there have been other hires as well who are focused on building out the commerce solution.

One key person is Tarun Jain, both an ex-Googler and ex-Microsoftie. We hear he has been talking with startups and entrepreneurs that work in the commerce/payments space, and if you go to his profile on AngelList, you can see that he has also followed a number of them. Whether that has been for potential acquisitions or partnerships, or just for his personal interest, is not clear.

On the subject of Twitter partnering with commerce companies, this would make some sense, if you think about how Twitter built out its wider audience by way of developer-friendly APIs that helped seed the service in a number of third-party apps.

As for why Twitter may be moving ahead on a commerce effort, this is perhaps inevitable. The company as it is today is based on advertising as its main revenue stream. Adding commerce would be a way for Twitter to demonstrate to the market that it is not a one-trick pony, but a true platform for people to transact, not just in ideas and news but money, too.

But whether it will succeed is a different question. Another social network that has made efforts in commerce is Facebook, but today its payments business accounts for less than 11 percent of revenues – $218 million out of $2.016 billion of sales in Q3 2013.

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