Elon Musk has outlined an ambitious plan to transform X, formerly known as Twitter, into a comprehensive financial hub aiming to replace the traditional banking system within a year. Musk made these intentions clear during an all-hands call with X employees.
Musk envisions X as a platform that will manage users’ entire financial lives, eliminating the need for traditional bank accounts. He emphasised that any financial transaction, whether involving money, securities, or other financial instruments, would be seamlessly facilitated on the X platform. Musk expressed confidence that this vision would be fully realised by the end of the next year.
The rebranding of Twitter to X reflects Musk’s past involvement in the online banking sector with X.com, a project that later merged with Confinity in 2000 to become PayPal. Musk believes that the original vision he had for X.com remains achievable.
What’s Musk’s plan?
Under Musk’s plan, X could potentially offer a wide range of financial services, including loans, debit cards, savings accounts, and peer-to-peer money transfers, regardless of users’ geographical locations. CEO Linda Yaccarino has also hinted at these developments in a recent blog post, where she mentioned X’s goal of enabling money to flow as freely as information and conversation. The company has already obtained money transmitter licenses in several U.S. states and is working toward launching a global payment system.
Musk’s vision for X is reminiscent of his past involvement in the payments sector when he established X.com during the dot-com boom, which later evolved into the widely recognised PayPal. His entrepreneurial journey led him to considerable success, eventually making him the world’s wealthiest individual.
Musk’s plan for the X app represents an innovative integration of Twitter’s infrastructure with X.com, designed to combine communication, multimedia, and comprehensive financial management capabilities. Twitter has successfully obtained money-transmitter licenses in multiple U.S. states, indicating its commitment to paving the way for financial integration.
The challenges
While Musk’s vision aligns with existing platforms like WeChat, a China-based social media platform that offers comprehensive financial services, it faces challenges within the context of X’s declining daily active user base and the difficulty of persuading users to switch to its paid subscription tier. X has reported that premium subscribers spend significantly more time on the platform than non-subscribers, but specific subscriber figures have not been disclosed.
Notably, various technology firms have previously ventured into the financial services sector with similar ambitions. Facebook’s Libra project, Google’s digital financial offering, and Amazon’s exploration of providing checking accounts all faced challenges and, in some cases, were abandoned due to regulatory scrutiny or other factors.
Integrating banking and payment features into the platform presents a significant challenge, as users will need to adapt to a new product name and financial functionalities. Musk’s decision to add high-cost debt to Twitter has introduced additional financial complexities. However, for the comprehensive financial services platform to come to fruition, users will need to embrace the changes and the new direction X is taking.
