By Darren Parkin
Having already disrupted payments by co-founding Paypal, Elon Musk – pioneer in the solar, car and space industries – looks set to re-embrace money transferring with ‘X’, his newly- branded Twitter.
Musk has made no secret of his love of Dogecoin and digital payments and now that he controls ‘X’, is about to create his ultimate ambition – an ‘everything app’ – to bridge the boundaries between tweeting/messaging and payments, and recently summed up by a BBC report: “Elon Musk rebranded Twitter to X – another step in his plan to emulate Chinese mega app WeChat”.
So, are Apple’s success and PayPal’s stablecoin announcement sources of Elon Musk’s inspiration? Apple’s collaboration with Goldman Sachs has introduced a high-yield savings account that has attracted over $10 billion in the less than five months.
Offering an impressive 4.15% yield, it is significantly outshining conventional bank interest rates but it is not only Apple that has been offering banks competition – $5.52trillion has been withdrawn from US banks and been invested in US money market mutual funds.
Meanwhile, PayPal has made headlines with its announcement of PayPal USD, a stablecoin backed by the US$. In contrast to conventional stablecoins, PayPal’s variant can be seamlessly converted into physical currency and utilised for trading various cryptocurrencies, or simply used at any of the 35 million merchants which accept PayPal.
These instances of success certainly serve as guiding lights for Musk as he navigates the uncharted waters of the digital payment landscape where innovation is the driving force.
Musk’s endeavour goes beyond mere rebranding; it is a bold attempt to craft an encompassing platform that transcends the realms of social media – extending its reach into e-commerce, financial transactions and perhaps even banking.
Interestingly though, it somewhat resembles the multifaceted Chinese super-app, WeChat, albeit infused with Musk’s distinctive touch. Furthermore, Musk’s fascination with the letter ‘X’ possesses profound roots. He was a co-founder of X.com, a precursor to PayPal, that marked his initial foray into the world of financial technology.
And this ‘X’ intrigue is not only limited to the sphere of digital payments; it manifests in his unconventional choices of nomenclature, spanning from his son’s name, X Æ A-12 (pronounced X-Ash-A-12), to his venture into SpaceX, his spacecraft manufacturing and exploration business.
But can Musk manifest this audacious vision into reality, particularly in Western markets where the concept of super-apps remains relatively novel?
His recent rebranding of Twitter to ‘X’ might well be hinting at something bigger – a potential revival of his digital payment ambitions akin to his early days with PayPal. He once ventured into online banking with ‘X.com,’ which is quite intriguing considering that typing ‘X.com’ used to redirect users to the PayPal site.
But now Musk needs to craft a digital payment solution that stands out in today’s crowded landscape of e-commerce platforms, digital payment services and online banks. Musk has been very vocal about cryptocurrencies such as Bitcoin and Dogecoin so it would be no surprise if ‘X.com’ integrated the use of cryptos or if he followed PayPal to create its own digital currency.
As Musk navigates this transformative journey from Twitter to ‘X.com’ we are undoubtedly in for some exciting innovations in the digital payments arena.
And seemingly, there is a convergence of Musk’s cryptocurrency ventures and Twitter’s X rebrand; whilst he is busy transforming Twitter into ‘X’, he has also been quietly backing Dogecoin and dreaming of taking it to new heights, possibly surpassing Bitcoin.
Musk’s plans go beyond simply throwing money at it; he envisions a “PayPal update” that could shake up the cryptocurrency market. Twitter’s CEO, Linda Yaccarino, has also hinted that with Twitter’s transformation in progress, Musk now is aiming to blend banking and payment features into ‘X’.
And the goal? Ostensibly, creating a bustling global marketplace where everything from audio and video to messaging, payments and banking, converges seamlessly.
Source: Business Today
So, it is no surprise that Musk has been seizing payment licenses for ‘X’ in seven states&mccid=86c1075f91&mceid=562a6d0508) in the US. Whilst the true role of cryptocurrencies within ‘X’ is still a mystery, Musk’s vision transcends the boundaries of traditional social media. ‘X’ aims to redefine the global town square (with a little help from AI) to deliver extraordinary user experiences.
But transforming his digital payment aspirations into reality necessitates Musk’s collaboration with Banking as a Service (BaaS) providers; these BaaS providers offer solutions that seamlessly integrate financial products into non-financial enterprises using cleverly-designed application programming interfaces (APIs).
In essence, BaaS unveils a wealth of financial opportunities for businesses venturing into the realm of financial services. Therefore, it is reasonable to anticipate Musk leveraging this toolkit as he breathes life into his digital payment vision.
And, there is more in Musk’s portfolio – he has also rolled out an intriguing referral initiative over at Tesla. Historically, the vehicle manufacturer has relied on its satisfied customers to spread the word about its electric vehicles instead of the conventional advertising route and now it has ‘sweetened the deal’ with by using enticing incentives and loyalty program initiatives:
- it furnishes customers with a referral link or code
- fresh customers who use a referral link can snag discounts and bonuses based on their purchases: Model S/X – $1,000 off, 3 months of full self-driving; Model 3/Y – $500 off, 3 months of full self-driving; solar roof – $500 off; solar panels – $500 off
- existing Tesla owners also get on board through a loyalty program that mirrors these perks
- customers do not need to struggle with manually inputting codes; a simple click to the referral link and the promotions automatically activate
- Tesla’s solar products also come with their own set of referral benefits
- a swift confirmation message promptly notifies you if the referral link has ‘worked its magic’
- customers/owners, described as “referrers”, can even earn rewards: Model S/X – 20,000 Loot Box credits; Model 3/Y – 10,000 Loot Box credits; solar roof – 9,000 Loot Box credits; solar panels – 9,000 Loot Box credits.
So, what is Elon Musk’s vision for Twitter, the “People’s Financial Institution”? Well, he has reported to his employees: “They are basically the same thing… In principle, you can use a direct messaging stack for payments. And so that’s definitely a direction we’re going to go in, enabling people on Twitter to be able to send money anywhere in the world instantly and in real time. We just want to make it as useful as possible.”
In other words, Twitter is envisioned to do more than just ‘tweet’ and, with this in mind, the list below summarizes Musk’s vision and ambition:
- verified Twitter users to get cash balances, essentially creating the “People’s Financial Institution”
- pursuit of money transfer licenses and filing of the necessary paperwork to turn Twitter into a payments processor
- offer of competitive interest rates within the Twitter platform, making it an appealing financial hub
- possible integration of loans as part of Twitter’s comprehensive financial services
- blurring the lines between messaging and payments, so envisioning instant global money transfers right within Twitter’s messaging system.
Of course, this bold vision faces its fair share of challenges, such as trust issues and navigating complex legal and financial regulations at State and Federal level, even before Musk looks overseas.
Nevertheless, Musk’s Twitter transformation could be the game-changer that revolutionizes both social media and finance; his digital payment ambitions are set to reshape the fintech landscape, fuelled by innovation.
And furthermore, could he finally create a much more user-friendly way in which to improve the way that the public use digital currencies? Whether it is boosting Dogecoin, turning ‘X’ into a financial hub for the public or linking messaging with payments, Musk’s vision could redefine digital payments.
But, should Musk be exploring digital payments in more depth and particularly focusing on Dogecoin? Offering users loyalty points in their Loot Box instead of interest might help manage tax implications. Alternatively, Musk’s ultimate goal may be to establish his brand as a household name, akin to iconic firms such as Hoover, FedEx, Google and Kleenex.
In essence, are Musk’s financial endeavours not merely to change the game but to create an entirely new one?
