No one doubts whether Eric Schmidt is a smart guy. The soon-to-be ex CEO of Google has scored big most notably at that company, as well as at Novell beforehand. The guy’s got a net worth of more than $5 billion, after all.

And yet, I’m not sure his TomorrowVentures was all that brilliant to invest in TwitPay last week.

The fact is we were discussing TwitPay here at Bank Innovation just last week, and our conclusion was that the venture probably faced an uphill battle becoming the go-to payments platform for Twitter. Why? Because people don’t buy stuff via Twitter, and we don’t think they will any time soon.

My sense is that TwitPay knows this, which is why last December it announced a deal with Incomm to facilitate payments through social games:

Twitpay recently announced a partnership with Incomm, another Atlanta-based corporation, to offer social gaming publishers access to a customized promotion and lead generation platform designed specifically around the social gaming model. The first social gaming campaign is due out in early 2011.

Certainly, Twitter ain’t what it used to be, with traffic on the decline at the messaging service in 2010. Last October, TwitPay all but acknowledged that it was abandoning the Twitter-only payments strategy it seemed to start with. The company wrote on its blog:

We are … working on a social commerce model. So, before long, you will be able to buy gift cards, electronics, books and more directly over Twitter and Facebook! The beauty is, if you register for one of our services, either giving, gaming or commerce, you’ll already be enrolled when you want to try our other services!

Well, that would be beautiful — only it is unlikely that people will do this en masse. There are already too many other payments platforms fighting — and that’s putting it mildly — to be the go-to social media and mobile payments providers. For example, do you see Facebook forsaking its Facebook Credits for, uh, TwitPay?

Look, I’ve got nothing on Eric Schmidt. But from where I sit, I think TwitPay has a tough row, and it doesn’t even have a marketing chief in place yet. Then again, what’s a few hundred shares of Google down the drain when you own 9.2 million at yearend 2010?