Can Elon Musk turn X into a significant financial platform?

Do you feel you can rely on X for all of your financial needs?

This is the core vision of Elon Musk’s Project X, and it’s the foundational element that has driven his dreams for what Twitter can become as it moves into the next phase.

In fact, Musk has had this dream since 2008, when he was working at PayPal and lobbied the company’s board of directors to change the name to “X.com” to promote a broader range of financial services.

Musk was eventually forced out of the company due to these allegations, but he remains dedicated and committed to making his X-Vision a reality.

Why? Because, as with everything else, Elon believes he knows a better way, and he’s determined to test that theory with his latest project.

Will that work?

Well, there’s a lot to consider.

Payment License

Before Elon can take any action, he needs to get regulatory approval to enable payments on the X App, but so far this has proven more complicated than he hoped.

According to a new report from Bloomberg: Musk had originally hoped to launch X payments worldwide by the end of the year, but was forced to scale back that goal to U.S.-only payments after initial resistance from U.S. government officials.

X Payments has money transmission licenses in 28 states, which is a first step in facilitating transactions within the app, but there’s still a long way to go before it can gain full approval, and that’s just in the U.S.; the company will likely face even bigger challenges in other countries.

Indeed, the approval process may be further delayed by Musk’s own animosity with certain governments — he has repeatedly criticized the Australian, Brazilian and German governments on a range of issues — that could work against him and his company as it seeks to expand into new areas.

And this is before you even consider the historical skepticism that places like India have shown around payments and online payment options.

Essentially, X is still a long way from this first step, but current plans call for X to obtain a full transmitter license in the US by the end of 2024. From there, X will also Payment processor licensesHowever, obtaining a money transmitter license would allow it to launch at least the first phase of its payments plan in the United States.

New Opportunities

Musk’s broader vision for payments is that this will allow X to explore new revenue streams, albeit less directly, through things like payment processing fees.

According to a Bloomberg report, Elon’s vision is that X It’s a digital payments dashboard that will “act as a centralized hub for all payment activity” online — meaning that the concept is that if you want to make a payment in another app or on another website, X will show up as a payment option, similar to PayPal or Venmo, although X doesn’t plan to charge users.

Rather, the document suggests that payments will increase “participation and engagement” among X’s users, broadening business opportunities for X. Eventually, X may also consider charging a sales commission on in-app product sales, but this too is subject to the next round of regulatory approval.

For now, X is simply looking to get people to save money within an X account, and sees it as a way to facilitate the first stage of a wider plan.

Company X could also consider offering high-yield savings accounts or other incentives to keep people putting money into their profiles, with the aim of changing addictive behavior.

It’s unclear how this will work as an incentive, given the limited availability of in-app payments, but this could be a first step in encouraging this expansion.

And ultimately, Elon sees this as a path to completing PayPal’s original vision, leveraging X’s influence to bring this new payment model to more users.

Market of the Future

In the past, Elon has said that in his view, PayPal is “It’s an unfinished version of what it could be.

Musk believes that the process on which PayPal, and the entire financial system, is built is flawed, relying on multiple database stacks that interact primarily through batch processing.

Musk’s view is that web-based payments can and should be processed in real time, and ideally X would fit there. Whether that’s true or not is unclear — Musk probably has a better view on this than most people, given his work at PayPal — but the question remains whether people really want this, and whether X actually provides enough value in every respect to make people want to manage their financial lives through an app.

Twitter tried with payments and in-stream shops but didn’t gain much traction, and just about every other social app has tried too, with poor results.

Then there’s Musk’s own problems: his constant willingness to share his thoughts on any news or political news has, as mentioned above, put him at odds with various governments and regulatory bodies, and damaged his reputation as a trustworthy “genius.”

Recently, more and more people have been expressing negativity towards Elon and his plans for the future, which may affect whether X Payments actually succeeds.

If his clients don’t trust him, they won’t trust him with their money, and in fact, Musk would be well advised to resist the urge to offer his thoughts and opinions on every issue.

But that doesn’t appear to be happening: continued delays in regulatory approvals and X’s declining revenues make it hard to imagine much of a change in Musk’s payments vision.

But maybe Elon sees something I don’t, and history will prove his broader vision for online commerce correct.