Plans are underway to turn X (formerly Twitter) into a payments app



Elon Musk, who acquired X (formerly Twitter), has revealed

plans to turn X into a payment service since the acquisition. This plan is still in progress at the time of writing, according to documents the company has filed with state regulators.

Documents Show How Musk's X Plans to Become the Next Venmo - Bloomberg
https://www.bloomberg.com/news/articles/2024-06-18/documents-show-how-musk-sx-plans-to-become-the-next-venmo



Musk has repeatedly called for the need for revenue sources other than advertising revenue, which has accounted for more than 90% of X's sales, and payment services are expected to be one of them. In order to become a payment service, X has submitted more than 350 pages of documents to regulators in 11 states regarding a money transfer business license. According to Bloomberg, which obtained the documents through a public records request, X does not seem to plan to impose large fees on the payment service, and it is stated that X is only aiming to integrate the payment service into X in order to increase the number of users and popularize the service.

X's payment service will allow users to add and store funds in their accounts, make payments to other users and businesses, and use the payment service to purchase products in physical stores. Bloomberg, which reported on X's payment service plans, said, 'It will include a Venmo -like payment function.'



X's regulatory filings also included financial details of the company. Musk acquired X in late 2022, but it has been revealed that the company has been struggling since then. According to the filing, X's revenue for the first half of 2023 was $1.48 billion, which is 40% lower than the revenue in the first half of 2022, before Musk acquired the company. X also recorded a loss of $456 million in the first quarter of 2023.

Musk also bought X for $44 billion, but the document states that he owns about 75% of the company's stock. The document also states that no other investors own more than 10% of X's stock.

X has established a wholly owned subsidiary, X Payments, for its payment services and has also set up a dedicated

website . According to the website, X is already licensed as a money transmitter in 28 states in the United States and is in the process of applying for licenses in all 50 states. X plans to launch its payment services across the United States in the second half of 2024. According to the filing, X originally planned to release its payment services internationally in early 2024, but postponed the plan due to regulatory backlash. In August 2023, X told Massachusetts regulators that it would resume its application for international remittance services after obtaining permission to operate in the majority of U.S. states.

Bloomberg has reached out to X and Musk for comment on the documents X filed with state regulators, but has not received a response at the time of writing.



Harshita Rawat, a senior payments analyst at Sanford C. Bernstein, said that while many big tech companies, including Google and Meta, have integrated payment services into their products, they have 'had very little success.'[14] The relationship between an individual and their bank is 'very sticky,' and 'it's very, very, very hard to get people to switch.'

Regarding fees for payment services, X wrote, 'Because our overall goal is to attract users to X, we do not plan to impose fees on all services,' and 'We plan to impose minimal fees at the launch of the service.' In fact, major payment apps such as Venmo, which is a competing service, do not impose fees on peer-to-peer payments. Bloomberg reports that X may take a similar measure, as most major payment apps only impose small fees on retailers, not on consumers.

Musk has also publicly stated that he plans to make X a kind of savings account by offering extremely high interest rates on X's payment services. Chris Stanley, Chief Information Security Officer for X's payment division, also spoke about X's payment service outlook, saying, 'You can store money in X and send it to X Payments users. Think of it like Venmo at first. Then, as things evolve, you'll be able to earn interest, buy products, and eventually use it to make purchases in stores (think of it like Apple Pay).'




X already has deals with payment service providers Stripe and Adyen to process credit and debit card transactions on its platform, and X Payments is expected to work with these partners. X Payments also has a partnership with Citibank, according to a filing with Massachusetts regulators in August 2023.

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in Software, Posted by logu_ii