Twitter reportedly partnering with PayPal rival; Stifel starts coverage

|By:, SA News Editor

A source tells re/code Twitter (TWTR) is close to a deal with online payments upstart and PayPal (EBAY) rival Stripe to allow it to handle credit card payments from its ~250M monthly users.

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.

TechCrunch reports Twitter also considered using PayPal before deciding on Stripe, and is looking to build an e-commerce marketplace similar to the one offered by fellow Jack Dorsey company Square.

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.

PayPal acquired rival Braintree for $800M last September, and more recently addressed an age-old customer complaint by updating its checkout process to fully integrate with merchant sites.

Meanwhile, Stifel has started coverage on Twitter with a Buy and $75 PT. Shares are up 1.5% AH.