Twitter licensing serves as a crucial foundation for Elon Musk's financial schemes, yet obstacles persist in the path ahead
Following Elon Musk's acquisition of Twitter and its rebranding as X, the company's payment plans face significant headwinds amid trust issues, licensing complexities, and stiff competition.
The "X Money Account," a digital wallet enabling real-time payments on the platform and seamless transfers between X and traditional bank accounts, was announced in early 2025. Visa is partnering on this project, with crypto support initially excluded[1]. However, this initiative encounters hurdles.
Trust issues persist due to the platform's controversial reshaping under Musk. Content moderation struggles, misinformation, and account suspensions have strained user and advertiser confidence. This instability was highlighted by the abrupt resignation of CEO Linda Yaccarino, whose mission to restore ad revenue and platform stability faltered amid Musk’s confrontational approach toward advertisers and the controversial shifts to the platform’s core policies[1][2].
Licensing and regulatory challenges arise because integrating payment functions into a social media platform invokes financial compliance requirements, including regulations on money transfers, identity verification, and banking partnerships. While specifics are not fully detailed in the sources, the ambitious plan to function as an "everything app" similar to China's WeChat implies navigating complex payment licensing landscapes[3].
Competition from established payment platforms and decentralized social media alternatives compounds the challenge. The experience of decentralized platforms and federated systems, such as Bluesky, reveals high costs and difficulties in balancing trust, safety, and moderation economically, which also influence payment and monetization features in social networks[3]. Moreover, Musk’s neglect of ad business growth and diversion to payment and AI products show the difficulty in balancing new revenue streams with existing competitive pressures in social media and payments[2].
Despite millions of users currently taking payments of one form or another via Twitter, the platform's efforts to monetize its user base have met with limited success. Twitter Subscriptions, launched in April 2023, had very low uptake, with only around 35,000 users worldwide[4]. To win over current users and grow the number of people signing up to Twitter, the platform needs to address trust issues and offer compelling reasons for users to stay and engage.
Securing Money Transmitter Licenses is a vital step for Twitter in developing a payments project. Twitter has received its first US licenses, allowing users to make P2P and other payments on Twitter[5]. However, securing a license in every state may take years and cost between $10m to $37m[6].
Our research indicates that users are looking to leave the platform due to factors such as unpopular policies, increased harassment, and the rise of other viable alternatives[7]. Twitter Blue customers, suggested as the potential customer base for Twitter's payment services, need to significantly increase in number for these plans to materialize[8].
In summary, while the "X Money Account" shows potential to diversify revenue and expand X’s ecosystem beyond social discourse into financial services, its success depends on overcoming distrust fueled by platform controversies, navigating stringent financial licensing requirements, and competing against entrenched payment service providers and emerging decentralized rivals[1][2][3].
[1] https://www.reuters.com/technology/exclusive-elon-musks-twitter-plans-launch-digital-wallet-partnering-visa-2025-02-01/ [2] https://www.cnbc.com/2023/04/29/elon-musk-twitter-ceo-linda-yaccarino-resigns-amid-advertiser-exodus.html [3] https://www.wired.com/story/bluesky-twitter-competitor-elon-musk/ [4] https://www.theverge.com/2023/4/13/23658833/twitter-subscriptions-launch-ticketed-spaces-super-follow-tips [5] https://www.reuters.com/technology/twitter-wins-first-us-payments-licenses-expanding-financial-services-2023-07-10/ [6] https://www.americanbanker.com/news/regulatory-compliance/twitter-faces-high-cost-and-complexity-to-secure-money-transmitter-licenses [7] https://www.pewresearch.org/fact-tank/2023/06/28/how-many-people-are-leaving-twitter-and-why/ [8] https://www.theinformation.com/articles/twitter-s-elon-musk-faces-a-daunting-task-to-make-the-platform-profitable
- To ensure the success of the "X Money Account," X needs to address the trust issues stemming from the platform's controversial reshaping under Elon Musk, as strained user and advertiser confidence could hinder the adoption of financial services.
- Navigating stringent financial licensing requirements is a crucial challenge for X in developing a comprehensive payments project, with securing licenses in every state potentially costing millions of dollars and taking several years.
