Elon Musk detailed his vision for Twitter’s plan to enter the payments market during a live meeting with Twitter advertisers hosted on Twitter Spaces on Wednesday. Twitter’s new owner suggested that in the future, users could send money to others on the platform, withdraw their funds to authenticated bank accounts and, later, perhaps, be offered a high-yield money market account to encourage them to transfer their money to Twitter.
The new remarks follow a report published this morning by The New York Times which confirmed that Twitter last week had filed registration documents that would allow it to process payments. The report cites Twitter’s filing with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), noting that a company would have to register before it could make money transfers, exchange currencies or cash checks.
At today’s meeting, Musk explained how paid verification, which Twitter is now rolling out with its revamped Twitter Blue subscription, and support for a creator ecosystem could pave the way for a payment system. on its platform.
He pointed out that, as a first step, Twitter would need to make fundamental changes to the technology architecture to better support video. It was recently reported that the company was working on a “Paywalled Video” feature that would allow creators to charge for access to their content. This suggests that Twitter could be moving into a space where it could try to compete more directly with various social media video providers, like TikTok, Instagram Reels, YouTube Shorts and others. The Washington Post has seen mockups of this concept where a tweet with a video could be unlocked for as little as $1.00. He said creators could choose from preset prices, like $1, $2, $5, or $10 when paid videos launched.
As a result, creators would end up with a cash balance when they start monetizing their content.
Additionally, Musk noted that Twitter’s paid verification program would help him with his payment plan, as anyone who subscribed to Twitter Blue would have already been verified by the “conventional payment system.” This means that Twitter Blue subscribers must sign up using a credit or debit card and have their payments processed through the app stores’ in-app purchase system, which helps combat fraud.
Musk then explained how this payment system could evolve saying that, once users have obtained a cash balance, Twitter could incentivize them to move that money to its platform. He might even make a small donation on users’ accounts to get them started.
“Now we can say, okay, you have a balance in your account. Do you want to send money to someone else on Twitter? And maybe we pre-fill their account…and say, okay, we’ll give you $10. And you can tweet it anywhere on Twitter,” Musk said.
Later, the user could withdraw their money from Twitter by transferring it to an authenticated bank account, he added.
Longer term, however, Musk seemed to be toying with the idea of establishing bank accounts on Twitter’s platform that would pay high interest to attract users. It could become a competitor, perhaps, to Apple’s recently launched savings account for its cardholders, various fintechs or other payment providers, like PayPal and Venmo, which encourage their users to hold cash balances. within their own ecosystems.
Musk explained that “the next step would be this offer for an extremely compelling money market account where you get an extremely high return on your balance.” If such a system existed, he thought people would transfer money to Twitter.
“And then add debit cards, checks, etc. and… just make the system as useful as possible. And the more useful and entertaining it is, the more people will use it,” he said.
Musk didn’t provide any details about the cryptocurrency plans, although The Information said that should also be part of his new payment system.
Of course, any of these ideas that Musk launched at that time can be dropped, changed, or entirely revamped later if or when they come to fruition. Twitter is entering an experimental era and much of what Musk says is ongoing, is just the idea of the day, and not necessarily an overview of Twitter’s roadmap.
That said, the decision to enter the payments business is tied to Musk’s larger plan to turn the social media platform into a “general purpose app” or “super app” called “X”. Although this plan is still quite vague today, the general feeling is that Musk aims to combine payments, social networks, entertainment and other things into a single experience, similar to WeChat in China (although this plan may be wrong).
Musk has a background in payments, of course, having founded an early digital payments company, X.com. It’s no surprise he’s trying again, given the opportunity provided by Twitter.
His insights into Twitter payments, however, may not have been good material for conversation with advertisers who are already worried about Twitter’s long-term commitment to their goals, given the switch from business to subscriptions, indicating a desire to reduce dependence on advertising dollars. Musk tried to allay those fears by saying that Twitter plans to protect advertisers’ longer-term brand safety, not just its ability to generate short-term sales.