Billionaire entrepreneur and businessman Elon Musk has revealed some further details of his vision to introduce payments to the Twitter platform. While there is still no solid ETA for the payments system to launch, Musk has stated that he wants it to initially focus on fiat currency, but built around an architecture which allows crypto payments to be added at a later stage.
While the initial exclusion of cryptocurrencies will be disappointing to some, Musk’s mere suggestion that crypto functionality may be implemented at some unspecified point in the future was enough to send Dogecoin fanboys into a frenzy, causing the token to spike to a 24-hour high.
However, many will rightly see this as a backwards step for Twitter. Co-founder and later Bitcoin-evangelist Jack Dorsey was already toying with offering crypto payments for tipping creators, before he left the company in late 2021 to focus on payments platform, Square. His replacement as CEO, Parag Agrawal, was tasked with actively developing Twitter’s crypto strategy, and set up subsidiary company Twitter Payments LLC in August 2022, before Musk took the reins.
According to a report by the Financial Times, Musk has now installed trusted-Lieutenant Esther Crawford as chief executive of Twitter Payments, and assigned a small team to forge ahead with the project. Despite the (at least temporary) removal of crypto functionality, the scope of Musk’s vision is now much wider than a simple tipping service, and includes peer-to-peer transactions, savings accounts and e-commerce. Insiders suggest the team has even had to devise a vault to store and protect the user data which will be collected by the system.
Twitter has also begun to apply for the US state regulatory licenses that it will require to launch its payment service. As we reported last year, Twitter first registered as a payments provider with the US treasury in November. It hopes to complete pan-US licensing within a year, before expanding this to gain international regulatory approvals.
The integration of payments into Twitter is a key part of Musk’s master plan to transform the platform into an ‘everything-app’, similar to China’s WeChat. This incorporates messaging payments and e-commerce, and has become a ubiquitous part of modern life for many Chinese citizens, something Musk is keen to emulate in the West.
Importantly, payment functionality would also create a much-needed new revenue stream for Twitter. Since Musk’s $44 billion takeover, the company has seen a large hole develop in its $5 billion annual advertising revenue, with many companies stepping back from the platform over concerns about the relaxation of content-moderation. Prior to the acquisition, in an early pitch to potential investors, Musk projected a potential $1.3 billion revenue from payments by 2028.
Whether Twitter can capitalize on its existing user-base and make headway into an already fairly competitive market remains to be seen. Musk certainly has both the background in payment-processing from his PayPal days and a loyal following who seemingly worship everything he does… but will that be enough? And “wen crypto?”… We continue to observe.