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Pay-by-Tweet Service Launched on Twitter

The first "pay-by-tweet" service has been launched on Twitter, with American Express introducing a service on Monday that lets its cardholders buy products simply by sending a short message.

The integration of a leading payment mechanism into Twitter represents one of the most ambitious attempts yet to build ecommerce directly into a social media site.

(Read More: Facebook vs. Twitter: The Real-Time Battle)

"We're turning a tweet into an actual transaction," said Leslie Berland, head of digital partnerships and development at the payments company. For the first time, Twitter users will be able to respond to an offer from a merchant and make a purchase without leaving the Twitter site, she added.

Under the arrangement, users who link their Twitter and Amex accounts will be able to accept offers from merchants by tweeting a hashtag included with the offer. Provided they also tweet their confirmation to a follow-up message from Amex, the payments company said it would forward their details to the merchant and complete the transaction.

Ecommerce has been slow to take off on social networks, with retailers who have tried to use their presence on Facebook to stimulate transactions reporting disappointing results.

(Read More: Twitter, Washington Post Also Announce Hack Attacks)

Twitter itself has tried offers, known as "Twitsclusives", through which merchants issue discount codes to users that they can use when shopping elsewhere, though these have not been widely adopted.

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Companies such as Facebook have held out ecommerce as a significant new source of business in the long term, though it is unclear whether they will be able to profit directly in transactions.

Twitter itself will not share in any of the transaction revenue from the Amex transactions, said Ms Berland, adding: "It is all our technology, built on their platform."

Twitter could benefit from the increased advertising surrounding ecommerce, as merchants send out more "promoted tweets" to publicize their offers, according to one person familiar with the arrangement.

(Read More: Twitter May Get Tax Breaks for Giving Away Promoted Tweets)

Twitter was hit by a hacking attack just over a week ago, raising questions about the security of its platform for payments and ecommerce. However, Amex said it would not share any of its account information with Twitter, removing the risk of fraud.

Ms Berland would not comment on whether Amex planned a similar service for Facebook. The payments company already has a service there and on other social networks to help merchants promote offers, though it has yet to add a payment feature to the service.

The new pay-by-tweet service is being launched with offers on three electronics items – Amazon's Kindle Fire HD tablet, an Xbox console package and a Sony camera – as well as discounted Amex gift cards.

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