In late November, X, the company formerly known as Twitter, acquired three more money transmitter licenses for Kansas, South Dakota, and Wyoming, bringing its licensure total to 12 states for payments processing.
This follows Musk’s efforts to transform X into a payments platform where users can access checks, debit cards, high-yield money market accounts, and loan services, with a longer-term goal of sending cross-border payments in real time.
According to an audio recording of a meeting obtained by The Verge, Musk suggested that a bank account will no longer be necessary once X payments are running at full capacity.
“When I say payments, I actually mean someone’s entire financial life,” Musk said on the recording. “If it involves money, it’ll be on our platform. Money or securities or whatever. So, it’s not just like send $20 to my friend. I’m talking about, like, you won’t need a bank account.”
“With money transmitter licenses in 12 states, X, formerly Twitter, is on its way toward attempting to become a player in the payments space,” said Daniel Keyes, Senior Analyst of Merchant Services at Javelin Strategy & Research.
“But even once X acquires all of its desired licenses, the company will have a tough time breaking into the competitive and complex payments industry given its inexperience in the space and lack of a unique payments hook for consumers.”
The Super App Race is On
If the past decade is any indication, the rise of WeChat, Alipay, and LINE has dominated the Asian market. WeChat has 1.2 billion active users monthly. Its claim to fame can be attributed to lower credit card penetration throughout Asian countries, leaving ample room in the mobile payment market. It also found a gap to fill among many underbanked populations.
Elon’s purchase of Twitter, and the later rebranding to X, was driven by his vision of transforming the platform into an “everything app” akin to Asia’s super apps.
Twitter began its first steps toward facilitating payments in November 2022. It registered with the U.S. Treasury’s Financial Crimes Enforcement Network to be a money transmitter, then followed the steps toward applying for state-level licenses.
Meta CEO Mark Zuckerberg has voiced a similar interest for its WhatsApp platform, wanting to convert the platform into a chat and an integrated marketplace.
Despite these efforts, super apps have not caught on broadly in the United States the way they have in Asia. This can be tied to a fragmented U.S. app market. Well-established players such as Apple, Facebook, and Google hold a considerable market share within the app categories, making it very difficult for new players to find room. Also, these established tech companies create a type of closed ecosystem where users are less likely to venture out and discover new app options.
