Musk's X aims for financial disruption with new payment system
Billionaire Elon Musk's social media platform X, formerly known as Twitter, has obtained its 13th money-transmitter license in the United States, this time from Pennsylvania. This milestone brings Musk's dream of transforming X into an "everything app" closer, positioning it as a formidable competitor to PayPal. With this license, X users can now transfer money to one another, much like PayPal's Venmo.
A hub for various financial activities
Since buying Twitter in October 2022, Musk has been working to turn X into an all-in-one app, similar to China's WeChat. He envisions X as a messaging platform and a hub for various financial activities, such as payments, taxi hailing, and merchant transactions. As reported by The Verge, Musk told X's employees that new financial features would be "rolled out by the end of next year," with users conducting their "entire financial life" on the platform.
Challenges in securing nationwide payment services
To provide payment services across the US, X must get approval from each state, a process that could take up to 18 months and cost millions of dollars. States that have already granted X money-transmitter licenses include Arizona, Georgia, Wyoming, and Maryland. However, industry experts believe that Musk's controversial statements and unpredictable actions at X could make it difficult to gain the trust of users and financial regulators.
Future plans and regulatory hurdles
Last year, during a live audio session, Musk mentioned plans to potentially introduce a debit card and money-market accounts on X. However, holding users' funds would require obtaining a bank charter or partnering with an existing bank, which presents additional regulatory challenges. A US state official told Reuters that they are currently reviewing X's money transmitter license application, with ongoing headlines surrounding Musk and X factoring into the evaluation process.
