Elon Musk, the visionary entrepreneur known for his involvement in companies like Tesla and SpaceX, is now making significant strides in turning the social media platform formerly known as Twitter, now rebranded as X, into an “everything app” with its own integrated payments system. X has recently been granted three additional money transmitter licenses in the United States, signaling its expansion into a total of twelve states.
Key Takeaway
Elon Musk’s X has expanded its payment processing capabilities by obtaining three additional money transmitter licenses in South Dakota, Kansas, and Wyoming. These licenses allow X to facilitate money transfers and process payments in a total of twelve US states. Musk’s vision for X includes transforming the platform into an “everything app” with its own integrated payments system, putting the company in direct competition with established players like PayPal. However, recent controversies and advertiser exodus pose challenges to X’s monetization plans, requiring the company to pivot towards small business advertisers and explore alternative revenue sources, such as Musk’s AI, Grok.
Expanding Reach
The latest states granting money transmitter licenses to X include South Dakota, Kansas, and Wyoming. These additions come after X had already been licensed in Arizona, Georgia, Iowa, Maryland, Michigan, Mississippi, Missouri, New Hampshire, and Rhode Island earlier this year. The licenses, associated with the entity called “X Payments LLC,” formerly known as “Twitter Payments LLC,” enable X to facilitate money transfers and process payments within each respective state.
Elon Musk’s Vision
In response to an article by The Street discussing the recent addition of South Dakota to X’s licensed states, Musk posted on X simply saying, “Progress.” This move aligns with Musk’s previous statements about transforming X into a payments platform. He envisions X as a platform where users can send money to others on the platform and withdraw funds to verified bank accounts, potentially even expanding to include high-yield money market accounts. By doing so, X would directly compete with established players like PayPal in the payments industry.
It’s worth noting that X’s entry into the cryptocurrency space is yet to be determined, although a money transmitter license would be a prerequisite if X were to support cryptocurrencies. Furthermore, X’s foray into payments is closely tied to its broader expansion into the creator economy. Creators on X, with a minimum of 500 followers and 5 million organic impressions on their posts over the past three months, can become eligible for revenue sharing through ads.
Challenges Ahead
While X’s ambitions to monetize through ads and payments appear promising, recent controversies have presented challenges. Following Musk’s endorsement of an antisemitic post on X and reports of brands’ ads being displayed next to hate speech, major advertisers including Apple, Disney, and Walmart have pulled their campaigns from the platform. Additionally, the loss of a deal with Paris Hilton’s 11:11 Media could impact X’s monetization plans. As a result, X will focus on attracting small business advertisers in the immediate future. The upcoming availability of Musk’s new AI, Grok, to X’s paid subscribers also represents another potential revenue stream.
