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

But despite Musk’s reputation as Big Tech’s closest ally in cryptocurrency, 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 has no plans to let users send and receive virtual currency, Bloomberg reported. Social media platforms have historically struggled to integrate crypto: In 2019, Facebook announced plans to launch the 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 as the company’s finances were ailing. Since then, the Tesla founder has explored new avenues for monetization and started a crusade to develop X into “an everything app.”

The documents obtained by Bloomberg reveal plans to include a feature that will allow users to store money in their from Venmo. According to the company’s website, X Payments has been approved for money transmitter licenses in 28 states, but it is seeking to become licensed in all 50 states. The company expects a multi-year process to obtain the necessary permits to operate nationwide, the documents show. which also noted that X has plans to obtain authorization for international money transfers.

Buying Twitter is an accelerator for creating X, the everything app

— Elon Musk (@elonmusk) October 4, 2022

Musk wants to emulate the success of WeChat, the Chinese ‘super app’ that merges social media, messaging and payments into a single platform, with more than 1.3 billion active users as of December 2023. Expressing these ambitions during a call with employees last October, Musk said: “When I say payments, I actually mean someone’s entire financial life,” according to audio of the meeting obtained by The Verge. “When it comes to money, it is on our platform. Money or securities or whatever. So it’s not just sending $20 to my friend. I’m talking about not needing a bank account.’

Western social media platforms have long wanted to move into payments, says Boaz Sobrado, a fintech analyst. Fortune in a note. “Social media platforms are predominantly advertising platforms from a business perspective. And advertisers desperately need transaction data: who buys what, when and why. This is what powers the machine learning models that digital marketing depends on,” Sobrado explains. Conversely, payment companies are trying to squeeze into the advertising space, he added. For example, a few weeks ago, PayPal announced the creation of an ad network that will allow merchants and brands to target their 400 million users with personalized promotions and ads based on their transactions.

‘It is logical’

“Regulations and ‘privacy’ policies from Apple, among others, have made it difficult for advertisers to get the data they need,” Sobrado explains. “So now advertisers are turning to financial companies. That is why it is logical that X becomes a financial services provider.”

While Musk has previously voiced the need for New York Times reported. The new documents also highlight 2023.

However, Philip Benton, a fintech analyst at Omdia, told us Fortune he is skeptical that there will be interest in using X for payments. The super app concept has not yet taken off in developed markets because of the choice consumers have to avail financial services from a range of market players, he said. It will be “difficult for consumers to change their payment habits” without “serious incentives” to lure them away from Venmo or PayPal, Benton added.

But as traditional banking services decline, the digital wallet race is “really a winner-takes-all opportunity,” said Cathie Wood, CEO of investment management firm ARK Invest, in conversation with Coinbase CEO Brian Armstrong at the State of Crypto Summit company last year. week. Whoever monopolizes the portfolio market can wield significant power in the financial sector, she said. The services offered by these fintech companies are quickly overtaking traditional banking. According to Worldpay’s Global Payments 2024 report, digital wallets accounted for half of all e-commerce transactions last year. For example, UK-based Revolut, a “neobank” – meaning a financial services provider that offers online banking but without physical branches – has positioned itself as the financial super app and has chosen the wording: “all-in-one financial app.”