Twitter and payment company Square last week announced a partnership whereby people could donate to political candidates via tweets, with Square serving as the back-end infrastructure. No money changed hands between the two companies, although Square does take a 1.9% processing fee from each donation.
Within hours of its launch, presidential candidates like Hillary Clinton, Marco Rubio, Bernie Sanders and Rand Paul had all availed themselves of the option.
From a business perspective, of course, the obvious question was how Twitter (TWTR) and Square are able to do business without Jack Dorsey having some sort of fiduciary conflict. He is chairman and interim CEO of Twitter, while simultaneously serving as CEO of Square (which is expected to file soon for an IPO). How can Dorsey adequately advocate for both sides?
The simple answer, according to a Twitter spokesman, is that he doesn’t get involved in such discussions or final decisions. Dorsey “recuses himself whenever Square things come up at Twitter and vice versa,” says the spokesman, who adds that Twitter also has worked with Square rivals like Stripe.
It also is worth noting that this political donation feature might not be one that lots of other payment companies were lining up to be a part of. One source at a rival to both Square and Stripe says that,for his company, the reporting and compliance around political donations made it more hassle than it was worth.