Elon Musk’s latest plan to add Venmo-like payments to X doesn’t include crypto

But despite Musk’s reputation as Big Tech’s closest cryptocurrency ally, Crypto Twitter enthusiasts won’t be able to store their digital assets in the X wallet. The company told regulators in Maine this year that it has no plans to allow users to send and receive virtual currency, Bloomberg reported. Social networks have historically had a difficult time embracing crypto—in 2019, Facebook announced plans to launch a Diem stablecoin, but it was shut down by regulators less than a year into its pilot.

Musk took over the social media platform known as Twitter in late 2022, as the company’s finances were ailing. Since then, the Tesla founder has been exploring new ways to make money, starting a campaign to turn the X into an “everything app.”

Documents obtained by Bloomberg reveal plans to include a feature that allows users to store money in their X accounts, pay other users or businesses, and buy goods and services in virtual stores, thus expanding beyond the likes of Venmo. IX Payments has been approved for remittance licenses in 28 states, according to the company’s website, but is seeking a license in all 50. The company faces a multi-year process to obtain the necessary permits to operate across the country, according to the documents, which also noted that X also has plans to secure permits for foreign money transfers.

Buying Twitter is a rush to create iX, an all-in-one app

– Elon Musk (@elonmusk) October 4, 2022

Musk wants to emulate the success of WeChat, China’s “premium app” that integrates social media, messaging, and payments into a single platform, amassing more than 1.3 billion active users as of December 2023. Announcing these ambitions during a call with employees at – Last October, Musk said, “When I say payments, I really mean the whole financial life of a person,” according to the audio of the meeting obtained by. The Verge. “When it comes to money. It will be on our platform. Money or securities or whatever. So, it’s not the same as sending $20 to my friend. I’m just saying, you won’t need a bank account.”

Western social networks have been looking to get into payments for a long time, said Boaz Sobrado, a fintech analyst. Good luck there is a note. “Social media is the most advertising platform from a business perspective. And marketers desperately need transaction data: who buys what, when, and why. This is what makes the machine learning models that digital marketing depends on,” explains Sobrado. On the contrary, payment companies were trying to enter the advertising space, he added. For example, a few weeks ago, PayPal announced the creation of an ad network that allows merchants and brands to target their 400 million users with personalized promotions and ads based on their activities.

‘Makes sense’

“Regulations and ‘privacy policies’ from the likes of Apple have made it difficult for advertisers to get the data they need,” explains Sobrado. “So now marketers are turning to financial companies. As a result, it makes sense for X to become a financial services company. “

Although X may charge a small fee for payment services, the company told regulators it wants to position payments as a way to increase revenue through “increased participation and engagement” in the app. Musk has expressed the need for X to diversify its revenue beyond advertising: For years, ads accounted for 90% of Twitter’s revenue, but it fell to 59% last year, New York Times report. The new documents also highlight X’s woes since Musk took over: The company generated $1.48 billion in revenue in the first six months of 2023, down nearly 40% year over year, and lost $456 million in the first quarter of 2023.

However, Philip Benton, a fintech analyst at Omdia, said Good luck doubt that there will be a desire to use X for payments. The super-app concept has not taken off in developed markets because of the choice consumers have to use financial services from many market players, he said. It will be “difficult for consumers to change their payment habits” without “serious incentives” to entice them to switch from Venmo or PayPal, Benton added.

But as traditional banking services decline, the digital wallet race is “definitely a winner-take-all opportunity,” Cathie Wood, CEO of investment management firm ARK Invest, told Coinbase CEO Brian Armstrong at the company’s last Crypto Summit. a week. Whoever dominates the wallet market will wield significant power in the financial sector, he said. The services offered by these fintech companies are quickly usurping traditional banks. According to Worldpay’s Global Payments 2024 report, digital wallets accounted for half of all e-commerce transactions last year. For example, the UK’s Revolut, a “neobank”—meaning a financial services company that offers online banking but has no physical branches—positioned itself as a premium financial app, choosing the words: “an all-in-one financial app . .”