Elon Musk’s ambitious plan for transforming X (formerly Twitter) into an “everything app” including payment network system has fueled hopes in the crypto community that is eagerly awaiting integration of their favorite cryptocurrencies to the social media platform.
A recent report by Bloomberg stated that Musk’s team is in planning stage to develop X into an everything app and integrate a payment network system in X wallet. The documents submitted by X to the state reveals that their team is working to develop an X wallet that will allow users to store money and transact/transfer it.
Musk’s plans have created a buzz in the crypto community, given how he is notably enthusiastic about cryptocurrencies and is also a leading advocate for Dogecoin. Even in March, Musk has expressed his interest in accepting Dogecoin (DOGE) as a payment method for Tesla vehicles in future.
However, the crypto community might be in for a rude shock as the proposed X wallet might not integrate cryptocurrencies anytime soon in future.
According to a Bloomberg report, these plans, obtained through public records requests, unveil X’s strategy to offer a Venmo-like service that enables users to store, send, and receive money directly within the app, as well as make purchases at physical stores.
According to over 350 pages of documents and emails submitted to state regulators, X plans to introduce a comprehensive payments feature allowing users to manage funds, conduct peer-to-peer transactions, and even shop at physical locations. This initiative is part of Musk’s broader goal to diversify revenue streams beyond advertising, which has traditionally accounted for more than 90% of X’s sales.
Financial statements show X generated $1.48 billion in revenue in the first half of 2023, a 40% decline from the previous year. The platform also reported a loss of $456 million in Q1 2023, reflecting the financial hurdles faced since Musk’s acquisition in late 2022 for $44 billion. Despite these challenges, Musk remains optimistic, envisioning X as the world’s largest financial institution in the future.
X Payments, a wholly owned subsidiary of X, has secured money transmitter licenses in 28 states and is working towards nationwide approval. However, the rollout of international payment features has been postponed due to regulatory setbacks. The company plans to reapply for international money transfer licenses after establishing operations across the majority of U.S. states.
Emails indicate that while X plans to charge minimal fees for its payment services, the primary objective is to enhance user engagement on the platform. This approach aims to integrate financial transactions seamlessly into the user experience, encouraging increased activity and interaction.
Musk’s venture into the payments space faces stiff competition from established players like PayPal’s Venmo, Block Inc.’s Cash App, and Zelle from JPMorgan Chase. Harshita Rawat, a senior payments analyst at Sanford C. Bernstein, notes the difficulty new entrants face in gaining traction against well-entrenched services, citing the “sticky” nature of consumers’ existing relationships with their banks and preferred financial apps.
To attract users and businesses, X plans to provide a digital dashboard for managing all payments activities, potentially offering additional banking services such as checking accounts and debit cards. This could also enhance X’s advertising appeal by positioning it as a hub for financial transactions and consumer purchases.
X has partnered with Stripe Inc. and Adyen to process credit and debit card transactions, and continues to seek additional collaborations to bolster its payment capabilities.
As X progresses towards its goal of launching payment services across the U.S. by the end of 2024, the company is preparing for a multiyear regulatory approval process, indicating a long-term commitment to reshaping the landscape of social media and digital finance.
Elon Musk’s vision for X to evolve into a multifaceted platform integrating social media and financial services is coming into sharper focus. As the company navigates regulatory hurdles and competitive challenges, its success in transforming X into an “everything app” hinges on its ability to seamlessly merge social networking with robust payment functionalities.
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