Elon Musk’s plan to transform X, formerly known as Twitter, into an “everything app” is coming into clearer focus, with newly revealed documents shedding light on the company’s strategy to integrate a comprehensive payments network into its social media platform.
Bloomberg reports that Elon Musk’s vision for X, the social media platform formerly known as Twitter, is taking a significant step forward with the reveal of detailed plans for a new payments system. Documents submitted to state regulators, obtained through public records requests, offer a glimpse into X/Twitter’s strategy to become a major player in the financial services sector.
The proposed payment feature bears a striking resemblance to popular peer-to-peer payment apps like Venmo. Users will be able to store money in their X accounts, facilitate transactions with other users and businesses, and even make purchases at physical stores. This move aligns with Musk’s stated goal of diversifying X’s revenue streams beyond advertising, which has historically accounted for over 90 percent of the company’s income — but has suffered tremendously under Musk.
However, the path to profitability through this new venture remains unclear. According to the documents, X doesn’t plan to charge significant fees for its payment services. Instead, the company views the offering as a means to boost user engagement and participation on the platform. This strategy raises questions about how X intends to monetize its payments feature effectively.
The financial details disclosed in the regulatory filings paint a challenging picture of X’s current business landscape. In the first half of 2023, the company generated $1.48 billion in revenue, representing a steep 40 percent decline compared to the same period in 2022, before Musk’s acquisition. Moreover, X reported a substantial loss of $456 million in the first quarter of 2023 alone.
Despite these financial hurdles, X is pressing forward with its payments initiative. The company has already secured money transmitter licenses in 28 states and is actively working towards obtaining approval in all 50 states. X Payments, a wholly-owned subsidiary, is spearheading this effort and aims to launch its services across the United States later this year.
However, industry experts caution that X faces significant challenges in the highly competitive payments market. Harshita Rawat, a senior payments analyst at Sanford C. Bernstein, points out that even tech giants like Google and Meta have struggled to gain traction with their payment products. The “stickiness” of traditional banking relationships and the chicken-and-egg problem of attracting both users and merchants pose substantial obstacles for new entrants in the field.
It’s worth noting that while Musk has been a vocal supporter of cryptocurrencies in the past, X’s current plans do not include support for virtual currencies. The company explicitly stated to regulators in Maine that it has no immediate intentions to facilitate cryptocurrency transactions on its platform.
Read more at Bloomberg here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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