French bank turns to Twitter for money transfers

One of France's largest banks launched a service on Tuesday to allow its customers to transfer money to other people via tweets on social network Twitter Inc. (TWTR.N).

The move by Groupe BPCE [BPCE.UL], France's second largest bank by customers, is an effort to attract attention and users to its S-Money mobile payments unit, which already allows people to transfer money over mobile phones via text message.

Created by the bank using Twitter's open software standards, known as APIs, the service allows French customers to send money to a friend regardless of which bank they use, and without requiring them to know the recipient's banking details.

For its part, Twitter is making its own separate push into the world of online payments as the social network seeks new sources of revenue beyond advertising.

Twitter is racing other tech giants Apple (AAPL.O) and Facebook (FB.O) to get a foothold in new payment services for mobile phones or apps. They are collaborating and, in some cases, competing with banks and credit card issuers that have run the business for decades.

"We salute the spirit of innovation of the BPCE," said Olivier Gonzalez, who heads Twitter France, in a statement.

Last month, Twitter started trials of its own new service, dubbed "Twitter Buy", to allow consumers to find and buy products on its social network.

The service embeds a "Twitter Buy" button inside tweets posted by more than two dozen stores, music artists and non-profits. Burberry (BRBY.L), Home Depot (HD.N), and musicians such as Pharrell and Megadeth are among the early vendors.

Twitter's role to date has been to connect customers rather than processing payments or checking their identities.

"From the Twitter point of view, there is a limit to their appetite for getting involved in payments processing itself," said Andrew Copeman, a payments analyst with financial services research firm AITE Group, who is based in Edinburgh, Scotland.

"At the moment, banks are probably viewing Twitter and other social media networks as marketing channels to reach a wider set of their customers and to extend the bank's existing mobile banking initiatives," he said.

Twitter's success in developing additional services on its platform as Facebook has done will be key to its future profitability. Rakuten Bank (4755.T) in Japan offers a similar "Transfer by Facebook" service that lets users of its mobile banking app send money to anyone in their Facebook friends list.

Investors have been worried about Twitter's slowing user growth, sending the shares down about 17 percent this year, while rival Facebook's have climbed 35 percent.

Thomas Husson, a marketing strategy analyst with Forrester Research, said Twitter was likely to multiply efforts to explore new ways to generate revenue with banks and credit card firms.

"Twitter wants to more explicitly demonstrate the overall value of its network as an advertising platform," he said.