American Express' (AXP) latest venture, in which it's supporting payments made through Twitter's platform, validates a concept that was in desperate need of it - social media commerce.

Up until the New York credit card company announced Monday it will allow its cardholders to purchase real-world items over the social media platform, there was doubt that Twitter transactions would ever get off the ground. "Amex definitely legitimizes it," says Rakesh Agrawal, a consultant on mobile payments and marketing. "They are a major player that has tens of millions of cardholders, and they are willing to spend on marketing."

He adds that while social media spending doesn't work for all kinds of purchases - "You are not going to tweet a hashtag to buy a car," Agrawal says - there is definitely a sweet spot.

"If you think about the infomercials that you see on TV, or even the Home Shopping Network, letting people tweet a hashtag rather than calling an 800 number to complete a purchase" would make the buying process far easier. "There is so much friction, of putting in your shipping information and signing into your account, something like this really takes all that friction out," he says.

Amex customers who now sync their plastic to Twitter will be able to buy Amex gift cards - as well as products from Amazon (AMZN), Sony, Urban Zen and Microsoft's (MSFT) Xbox 360 - using special hashtags such as #BuyAmexGiftCard25. The company is initially incentivizing the payments with discounts.

There is no revenue-sharing agreement with Twitter, according to an Amex spokesperson.

"It was a collaborative effort that involved members of teams across the organization who helped build the technology, work with the merchant partners and handle the communications," says Bradley R. Minor, an Amex vice president of digital communications strategy, in an email to American Banker.

He adds that, at least at first, these new Twitter payments won't work with Amex's prepaid card products or the company's digital wallet, Serve. That means, by extension, Amex's Bluebird customers won't have the ability to make payments over Twitter, either.

Indeed, Amex is not the first to start offering customers a way to send cash to merchants over social media networks. Both Dwolla and Chirpify have been moving money over Twitter for at least the past year. And Vantage Credit Union has used the social network platform to move cash.

In fact, Chirpify chief executive Chris Teso says that American Express' decision to start moving money over 140-character messages will give this business is a much-needed push.

"A giant company like Amex is marketing for us, it's amazing," he says. "They are totally validating the social commerce market."

Unlike Amex, Chirpify can move money from a number of different cards funding a person's PayPal account over Twitter.

"We're killing it," he says. "We have built an actual commerce system that has actual features for brands. We have a much more robust [service] than what Amex's little promo is doing." All first-mover criticisms aside, Amex has been more deeply embedding its services within social media - Facebook, Twitter and Foursquare - over the past several years.

For instance, in 2011, the company launched its Go Social program, which helps merchants create social and mobile offers and receive detailed reporting on those offers. And last year, Amex began allowing its cardholders to sign up for discounts via Twitter. Those purchases were later made offline.

No doubt, the company is looking to attract a broader base of customers and is currently innovating around the transaction data that it continuously collects.

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