Twitter's new Tip Jar sparks privacy backlash

Twitter's new Tip Jar feature, which enables users to monetize their tweets, has led to immediate privacy issues.

Tip Jar, which launched Thursday, allows content creators to add a button to their profile that allows others to pay them without leaving Twitter. Journalists, nonprofits and other experts can use the feature as well.

Once the service went live, complaints surfaced on social media from Rachel Tobac, CEO of Social Proof Security, who is testing Tip Jar. Tobac said that when a person sends a tip using PayPal, the recipient gets the sender's physical address.

Social Proof Security did not respond to a request for an interview by deadline. On social media, Tobac also said PayPal should identify what data money receivers are getting and Twitter should educate users who aren't aware of what information they are sharing.

Twitter did not respond to an interview request, but it issued a statement saying it's updating its tipping prompt and help center to make it clearer that other apps may share information between people sending and receiving tips, per the terms of the apps. Tip Jar connects to Bandcamp, Cash App, Patreon, PayPal and Venmo.

PayPal advises that when users send and receive money, there are two options a customer can select before processing the payment on how that money is sent. “Goods and Services” is used to buy or pay for an item or service from someone and will automatically share the customer’s address with the recipient for the delivery of those goods and services.

"Customers can toggle within the payment flow to select 'Friends and Family,' which does not share the address with the recipient. This is the standard functionality of the PayPal app," Tom Hunter, from PayPal's global consumer communications group, said in an email, adding it would work with Twitter closely to ensure user awareness.

Twitter has used a buy button for years to keep people inside its app; and many fintechs and payment companies use Twitter as part of their own logins. Twitter has drawn attention over security concerns following a cyberattack in 2020.

PayPal has also been on the other side of this issue. PNC Financial Services Group did not allow automatic enrollment in Venmo due to a dispute with account aggregator Plaid, which PayPal's Venmo used to verify bank accounts.

"Unexpected problems frequently appear when two systems are integrated together and tested cooperatively," said Tim Sloane, vice president of payments innovation at Mercator Advisory Group. "The finger pointing here suggests this integration wasn't cooperative."

The interoperability issue for Tip Jar, and PayPal and Twitter's insistence of an existing workaround that the users enable, could cause other issues down the road, according to Sloane.

"Each network claims their system is operating as expected, so obviously that problems are with the other system," Sloane said. "It will be interesting to see how tenable that position is with users and regulators."