The deal could allow Twitter, which entirely relies on ads and (to a lesser extent) data licensing to monetize its platform, to open up a new revenue stream. With many top brands and retailers already advertising on Twitter, there are also opportunities to link marketing campaigns with e-commerce. Chinese microblogging leader Sina already supports online payments.
Though still the 800-lb. gorilla of online payments, PayPal is facing stiffening competition from Stripe, Amazon (previous), and others when competing for the business of e-commerce sites not named eBay.
Meanwhile, Stifel has started coverage on Twitter with a Buy and $75 PT. Shares are up 1.5% AH.