Twitter
TWTR
recently announced the launch of its in-app payments feature Tip Jar in India. The social media giant has integrated Indian payment gateway Razorpay in the app. The feature was introduced last month in the United States.
Tip Jar will enable creators to monetize their content and earn from their supporters. Twitter aims to enable Indian users to make payments on its platform, through Tip Jar, to non-governmental organisations (NGOs) journalists, freelancers, content creators and other civil-society groups looking to mobilize funds.
Currently, only a limited group of people, including creators, journalists, public figures, experts, and community leaders, will be able to see the option of adding Tip Jar to their profile.
Tip Jar icon will enable users to send tips by linking their existing accounts with payment providers including Razorpay,
PayPal
PYPL
, Cash App, Patreon, Bandcamp and Venmo.
By using Razorpay’s interface, users will be able to support individuals and organizations across India through multiple modes of payment including UPI, credit and debit cards, net banking, wallets and more.
Markedly, Tip Jar is currently available in multiple Indian languages including Bengali, Gujarati, Hindi, Kannada, Marathi and Tamil and supports Twitter profiles only on iOS and on profiles as well as Spaces on Android.
India is currently the third largest Twitter user after the United States and Japan. The recent launch is expected to boost user engagement and performance of Twitter’s shares, which have returned 26% in the year-to-date period compared with the Zacks
Internet – Software
’ and the S&P 500’s rally of 0.4% and 14.4%, respectively.
Year to Date Peformance
Image Source: Zacks Investment Research
Twitter’s Push to Capture Indian Market Despite Obstacles
Twitter is accelerating its expansion in a country that is rapidly embracing online payment and e-commerce.
As Indian tech adoption continues to accelerate, every digital platform is looking for ways to establish a firmer foothold in the Indian market as well as boost usage among India’s 1.4 billion citizens. The number of active internet users in the country is likely to grow nearly 45% to 900 million by 2025 compared with 622 million as of last year.
Recently,
Alphabet
GOOGL
owned Google entered into a cloud partnership with India’s Reliance Jio Infocomm, helping the country’s biggest wireless carrier with technology solutions for its enterprise and consumer offerings as it plans to launch 5G services.
Last year, Google invested $4.5 billion in Jio’s parent Jio Platforms much like rival
Facebook
FB
which picked up a 9.99% stake in Reliance Industries’ Jio Platforms at $5.7 billion.
Twitter is also moving forward with strategic rollouts at a fragile time in the global economy. While many businesses have been hurt by the fallout from the coronavirus pandemic, large technology companies are positioned to benefit as more people turn to their services, while spending time indoors.
Twitter is rolling out the new tipping feature even as it has lost its intermediary status for not complying with India’s IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 that came into effect on May 26. However, agreeing to the new rules could also subject the Zacks Rank #4 (Sell) company including Facebook and Google, to higher taxes.
As of now, tech companies that are not based out of India are not liable to pay any corporate taxes on any income they make within the country. The only tax they pay account for up to 10% of their income. For entities that do have an office in India, corporate taxes may increase to 40%, which is four times the value that tech giants are currently accustomed to paying.
This demonstrates the Indian market’s importance for Twitter, as it chose to launch Tip Jar within a month of it going live in its home market in the United States despite being caught in a tussle with the Indian Government.
Indian creators are looking for new opportunities, sparked by the popularity of TikTok and other social apps. Providing incentives can be fruitful for Twitter in attracting entertaining and informative creators and to keep them coming back.
Moreover, Twitter will not charge its users for this service nor will it take a commission. Besides Razorpay, it could add other payment gateways to its support list in the future.
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