This week American Express (AXP) and Twitter announced a partnership to allow people to buy things by tweeting. It works like this: You sync your Amex card to your Twitter account, and then you can start making purchases by putting hashtags in your tweets that correspond with special deals Amex is offering—today as of noon, for example, a limited supply of Kindle Fires, Xbox consoles, and special Donna Karan-designed Urban Zen bracelets, among other items, are on offer. You send your tweet out to your followers—“So excited to wear my Donna Karan Urban Zen bracelet while playing Halo 4!” or something like that—and include the hashtags. Amex sends you a confirmation tweet, and when you respond to it, the transaction is complete.
To paraphrase Marshall McLuhan, the medium of exchange is the message.
There is, at first blush, something conceptually confusing about the whole idea. We tend to think of Twitter as a form of communication, not commerce. Paying by Twitter seems to make as much sense as keeping up with your old college roommate by PayPal. But American Express is betting that there’s a whole market of consumers who treat shopping as a sort of performance, who like spreading the word about good deals and great finds. The kind of people who love explaining how much of a discount they got on their new shoes, or who make “unboxing” videos on YouTube where they spend five minutes unpacking a new tech gadget while narrating the process. Amex is also confident that the rest of us find those people’s advice and tips valuable rather than a nuisance.
According to Leslie Berland, who runs digital partnerships for American Express, that confidence comes from previous collaborations with Facebook (FB), Foursquare, and Twitter itself. (It was possible even before this week to get Amex deals by tweeting hashtags, but you had to go to the store or store website to redeem them.) “Customers loved sharing with other people,” Berland says. “There was so much viral activity, we saw new customers who walked into establishments, and those who redeemed the offers went back again.” She doesn’t provide exact figures but says that Amex customers cumulatively saved millions of dollars on the deals.
The partnership is part of a larger push by social networks into e-commerce, as they take all the information they have about users and try to make money off it. In Twitter’s case, that means taking the web of relationships people have built on the network and using it to push products. The idea is that we’re more willing to pay attention to a plug for something if it comes from someone we have decided, in Twitter’s religion-tinged term, to “follow.” (Twitter doesn’t get a cut of the Amex purchases.)
The big hurdle for this particular endeavor is that Twitter doesn’t have the best reputation for security—Twitter accounts are notoriously hackable. And while that’s a problem when someone commandeers a person’s Twitter account and blasts out a stream of embarrassing tweets, it’s for many people a problem of a different order when credit-card information enters the picture. To allay those concerns, Berland emphasizes that Twitter never gets the credit-card information; it stays with Amex. In addition to the confirmation tweet, Amex sends a confirmation e-mail when a transaction goes through, so if someone does hijack your Twitter account and run up a tab, you’ll know right away.
Berland doesn’t think security concerns will give consumers pause. American Express, she points out, has a very good reputation for keeping customer information safe. “We’re trusted and well-known for safety and security. That’s a very important part of the story,” she says. Whether that can survive a partnership with Twitter remains to be seen.
Businessweek.com — Top News
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