X Aims to Boost Engagement With Payments as Revenues Plunge
X is reportedly preparing for a multiyear campaign to launch its payments business.
But when that happens, Bloomberg Businessweek reported Tuesday (June 18), the Elon Musk-owned social media app sees payments as a way to bolster its business via “increased participation and engagement” on its platform.
The report is based on a wealth of documents submitted by X to regulators, and obtained by Bloomberg via public records requests.
According to those documents, X is planning a digital dashboard on its website and mobile app that will function as a hub for all payments activity, letting users send and receive money, store funds and see past transactions.
The company will charge small fees for some transactions, it said in a business plan submitted to regulators in Massachusetts last August.
“However, Twitter Payments does not anticipate charging fees for all of its Services, as the overall goal of the Services is to help increase participation and engagement on the X Platform,” the company wrote.
PYMNTS has contacted X for comment but has not yet gotten a reply.
In addition to detailing X’s payment efforts, the documents also spotlight the company’s struggles since Musk took over in 2022. They show that X — formerly Twitter — generated $1.48 billion in revenue in the first six months of last year, a nearly 40% decline from the same period in 2022, before Musk’s $44 billion purchase. The company lost $456 million in the first three months of 2023.
The company’s X Payments has money transfer licenses in 28 states. The company had originally aimed to release payments features internationally as soon as early 2024, but held off on those plans following regulatory pushback, the documents show.
Musk had said during a call last year that he envisioned X becoming a payments super app by the end of 2024.
“If it involves money, it’ll be on our platform,” he said. “Money or securities or whatever. So, it’s not just like sending $20 to my friend. I’m talking about, like, you won’t need a bank account.”
As the Bloomberg report notes, even with the blessing of regulators, X still faces an uphill battle, needing to build services and convince consumers to switch from its competitors, including PayPal, a company Musk helped found.
Harshita Rawat, a senior payments analyst at Sanford C. Bernstein, told Bloomberg that tech giants like Google and Meta have struggled to find a mass audience for their payments products. She added that people’s relationships with their bank can be “very sticky.”
And as covered here, research by PYMNTS Intelligence bears that out, with more than half of consumers trusting their financial institutions over other companies to offer a safe super app.
Rawat added that upstart payments firm also face the obstacle of forging deals with businesses to draw customers, when the best way to sell prospective partners that such deals are worthy is to already have a strong customer base.
“There is a big chicken and egg problem here,” Rawat said.
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