Elon Musk’s ambitious plan: Transforming Twitter into a financial services house

As per a report from Bloomberg, numerous technology firms have ventured into the realm of financial services with similar ambitions. For instance, Facebook dedicated considerable resources to a project called Libra, which aimed to revolutionize cross-border payments. However, due to regulatory scrutiny, the project had to be abandoned. Similarly, Google had plans for a digital financial offering and even secured 11 banking partners for the launch. Nevertheless, the entire plan was unexpectedly scrapped. Amazon.com Inc. also explored the possibility of providing checking accounts to consumers, but ultimately, the project did not materialize.

US tech companies have encountered challenges when trying to compete with established banking giants, often leading them to scale back their initial ambitions due to tough competition and lengthy approval procedures. However, Elon Musk stands apart from other tech executives with his unconventional approach to business decisions, evident in the surprising moves he has made at Twitter, such as replacing its iconic bird-based brand with the letter X. Moreover, Musk has prior experience in the financial technology sector, as he was the founder of the company now recognized as PayPal Holdings Inc.

“I’m not saying at all that he can’t do it,” said Pranav Sood, executive general manager at cross-border payments platform Airwallex. 

“But it’s something that takes time and it’s something that takes investment because you have to make sure that you do things right in order to stay compliant globally,” adds Sood.

Reportedly, Musk’s envisioned X app represents a groundbreaking integration of Twitter’s underlying infrastructure with X.com, currently serving as a routing service to Twitter. This innovative app will combine communication, multimedia, and the comprehensive functionality to manage one’s entire financial world.

In messages expressing support for Musk’s ambitious overhaul, Twitter’s CEO, Linda Yaccarino, confirmed that the X app would incorporate fintech features, including payments and banking capabilities. To pave the way for this financial integration, Twitter has successfully obtained money-transmitter licenses in four U.S. states, namely Arizona, Michigan, Missouri, and New Hampshire.

The report suggests that in 2022, during his acquisition of the social media platform, Musk shared his vision through tweets, expressing his desire for Twitter to emulate Tencent Holdings Ltd.’s WeChat model. WeChat, a messaging service turned super-app, boasts over a billion daily users in China. Musk’s aspiration was to transform Twitter into a similar multifunctional platform, resembling WeChat’s success as a fintech titan. Like WeChat, the envisioned Twitter would enable users to send funds to each other, make payments for goods and services, and even have access to borrowing options.

Musk’s venture into payments wouldn’t be his first. During the dot-com boom, he made a move to Silicon Valley and established a company initially named X.com, which later evolved into the well-known PayPal. Musk’s fortunes took a significant turn when he sold PayPal to eBay Inc., marking his first major success.

Despite opportunities in the banking sector, Musk opted to decline “several high-paid jobs on Wall Street” to stay focused on technology—a decision that has undoubtedly paid off. Presently, he holds the title of the world’s richest person, with a staggering net worth of $238.9 billion, as reported by the Bloomberg Billionaires Index.

The Bloomberg report further suggests that Integrating banking and payments features into the platform will demand users to familiarize themselves with a company sporting a brand-new product name, along with its own set of financial challenges. Musk’s decision to burden Twitter with high-cost debt has added to these woes. Nevertheless, for the vision of a comprehensive financial services platform to materialize, users will need to adapt to these changes and embrace the new direction Twitter is taking.

(With inputs from Bloomberg)

Updated: 26 Jul 2023, 10:51 AM IST