X has no plan to charge any significant fee for its potential payment service, per the details in the documents.
Free speech advocate Elon Musk has plans to integrate a payment network into X, his social media networking service but in the last few months, not much has been said about the project. However, some documents submitted by the company to state regulators show that it is still pushing for the move. It is worth noting that this is also part of Musk’s plan to make X an “everything app”.
X to Become the Next Venmo Platform
According to a Bloomberg report, the new information comes from documents and emails submitted by X to about eleven states in the pursuit of a money transmitter license. They include financial statements, business plans, and organizational charts.
According to the more than 350-page document, Elon Musk is targeting a Venmo-like payment feature that makes it possible for users to store funds on their X account. With this service, X users can pay other users or businesses and also make payments for purchases in physical stores.
For the longest time, X owner has constantly highlighted that the social media company needs more revenue than it does advertising. Notably, the advertising side of X has made more than 90% in sales over the years. Musk is positive about X’s capacity to become the largest financial institution globally. It is therefore not surprising that the company is moving forward with its payment feature plans.
X has no plan to charge any significant fee for its potential payment service, per the details in the documents. On one hand, the company mentioned to regulators how it intends to use the payment feature to boost its business through “increased participation and engagement” on the X app.
X Revenue Drops after Musk’s $44B Takeover
Details about the company’s business struggles since 2022 when Elon Musk took over after a $44 billion bid, were shared with the state regulators in the documents.
For context, the social media platform recorded $1.48 billion in revenue within the first half of 2023. This was a far cry from the figures generated around the same time in the previous year just before Musk took over ownership. In Q1 2023, X lost approximately $456 million in revenue.
Noteworthy, X Payments, a wholly-owned subsidiary of the company, has received several money transmitter licenses from about 28 states including one from Louisiana state authority.
However, its bigger picture includes getting approved in all 50 states of the US and launching its payment services across the region before the end of 2024. The X Payments system aims to integrate various financial services right into the app, so users can handle all their transactions without needing a bank account.
Most of the emails sent to the state regulator suggest that X is prepared for the several years that it may take for it to get the permit that it requires for nationwide operations. Some regulatory setbacks recently forced the firm to postpone its plans to release the payment services internationally earlier this year.
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