Elon Musk’s latest plan to add Venmo-like payments to X excludes crypto

Elon Musk’s latest plan to access your wallet involves literally becoming a wallet. New details have emerged about Musk’s plans to launch his “X Payments” payment network later this year, according to 350 pages of documents and emails regarding money transmitter licenses submitted to regulators in 11 states and obtained by Bloomberg.

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 an X wallet. The company told regulators in Maine this year that it had no plans to allow users to send and receive virtual currencies, Bloomberg reported. Social media platforms have historically struggled to incorporate crypto: In 2019, Facebook announced plans to launch its Diem stablecoin but was shut down by regulators within a year of the pilot.

Musk took over the social media platform formerly known as Twitter in late 2022 due to the company’s poor financial situation. Since then, Tesla’s founder has been exploring new ways to make money and launched a campaign to turn X into “an app for everything.”

Documents obtained by Bloomberg reveal plans to include a feature that would allow users to store money in their X Payments is approved for money transmitter licenses in 28 states but is seeking licenses in all 50 states, according to the company’s website. The company is awaiting a multi-year process to obtain the necessary permits to operate nationwide, according to the documents. He also stated that X planned to obtain permission for international money transfers.

Buying Twitter accelerates creation of everything app X

— Elon Musk (@elonmusk) October 4, 2022

Musk wants to emulate the success of China’s “super app” WeChat, which combines social media, messaging and payments on a single platform and has amassed more than 1.3 billion active users by December 2023. Articulating these goals during a call with employees last October, Musk said: “By payouts, I actually mean someone’s entire financial life,” according to audio recordings of the meeting obtained by The Verge. “If it involves money, it will be on our platform. Money, securities or whatever. So it’s not just about sending $20 to my friend. I mean you won’t need a bank account.

Western social media platforms have long wanted to move into payments, fintech analyst Boaz Sobrado said in a note to Fortune. “Social media platforms are predominantly advertising platforms from a business perspective. Advertisers also urgently need transaction data: Who is buying what, when and why? This is what fuels the machine learning models on which digital marketing is based,” Sobrado explained. Conversely, he added, payment companies are also trying to infiltrate the advertising space. Just a few weeks ago, for example, PayPal allowed merchants and brands to target its 400 million users with personalized promotions and ads based on their transactions. announced the creation of an advertising network that allows

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‘Logical’

“Regulation and ‘privacy’ policy from companies like Apple have made it difficult for advertisers to get the data they need,” Sobrado explained. “Advertisers are now turning to financial companies. “As a result, it seems logical for X to evolve into a financial services company.”

While Musk has previously stated that The new documents also highlight lost millions of dollars.

But Philip Benton, a fintech analyst at Omdia, told Fortune he is skeptical that there will be an appetite for using X in payments. He said the super app concept has not become widespread in developed markets as consumers have to avail financial services from various market players. Benton added that “it will be difficult for consumers to change their payment habits” without “serious incentives” to move them away from Venmo or PayPal.

But as traditional banking services decline, the digital wallet race is “truly a winner-takes-most opportunity,” Cathie Wood, CEO of investment management firm ARK Invest, said in a conversation with Coinbase CEO Brian Armstrong at the company’s State of Crypto Summit. week. He said whoever monopolizes the wallet market will have significant power in the financial sector. The services offered by these fintech companies are quickly usurping traditional banking. Digital wallets accounted for half of all e-commerce transaction value last year, according to Worldpay’s Global Payments 2024 report. For example, Revolut, a UK-based “neobank” (meaning a financial services company that offers online banking but no physical branches), has positioned itself as a financial super app, preferring the phrase: “all-in-one finance app.”

This story first appeared on Fortune.com

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