Billionaire Elon Musk, who acquired Twitter on October 27, has outlined his plans to bring a payments system into the social media platform.
At a livestreamed meeting with Twitter advertisers, hosted on Twitter Spaces last evening, Musk, suggested that, “users would be able to send money to others on the platform, extract their funds to authenticated bank accounts and, later, and also be offered a high-yield money market account to encourage them to move their cash to Twitter”.
Post Musk’s comments on the new payment plans, a report by The New York Times confirmed that last week the company had filed registration paperwork that would allow it to process payments. The report mentioned Twitter’s filing with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Any business would need to register before it could conduct money transfers, exchange currency or cash checks.
Musk said that the paid verification as well as support for a creator ecosystem, could drive the new payments system on its platform. For example, Twitter’s paid verification program would help in its plan for payments because anyone who subscribed to Twitter Blue would have already been verified by the system. The billionaire said that Twitter Blue subscribers have to sign up using a credit or debit card and have their payments processed through the app stores’ in-app purchase system. Also, the company is reportedly working on what it calls a ‘pay-walled video’ feature that would allow creators to charge for access to their content. And as they began to monetise their content, they would end up with a cash balance.
Musk further explained that how this payments system could work on Twitter. “Now ..., you’ve got a balance on your account. Do you want to send money to someone else within Twitter? And maybe we pre-populate their account…and say, okay, we’re gonna give you 10 bucks. And you can send it anywhere within Twitter,” he said. Later, the user could move their money out of Twitter by transferring it to an authenticated bank account, he added.
While with the idea of establishing bank accounts on Twitter’s platform to attract users is currently at an experimental phase, in the long run, the service is likely to rival fintechs or other payment providers, like PayPal, WePay and Venmo, which encourage users to retain cash balances within their own ecosystems. And even though Musk didn’t talk about plans for cryptocurrencies, a report by The Information said that cryptos can also be a part of its new payments system.
Albeit too early, analysts say Musk’s move to enter the payments business brings back his vision to turn the social media platform into an “everything app” called “X” that he said, will combine payments, social networking, entertainment and other things into one experience.
Musk indeed has prior experience in payments. Besides cofounding PayPal, he co-founded an early digital payments company X.com in 1999 in Palo Alto, California. In 2000, X.com merged with competitor Confinity Inc., a software company also based in Palo Alto, which later merged into PayPal.