Despite not reaching Elon Musk’s original target for a 2024 launch, X is now moving ahead with its money transfer process, with X Money to be activated “later this year”, enabling users to make payments in the app, and transfer funds into their bank account.
As per X CEO Linda Yaccarino:
“Another milestone for the Everything App: Visa is our first partner for the X Money Account, which will debut later this year […] First of many big announcements about X Money this year.”
As Yaccarino notes, Visa will power the new “X Money” service, and will support payment transfers between traditional bank accounts and a digital wallet within the app to enable instant peer-to-peer payments.
The announcement comes after a series of delays for X’s payment plans, which is the backbone of Elon Musk’s “everything app” vision. For example, X is still in the process of securing payment transmitter licenses in the U.S., the first step in the process, and at last check, it had actually withdrawn its application for such in New York, a key state for its payments push.
Indeed, according to Elon himself, X’s payment licensing process would be “irrelevant until California and New York approve us.”
Evidently, X has a plan to rectify this element, and with payment processor approvals in 41 other states thus far, it is well on the way to ticking off that first key box, which would then enable this next step.
Maybe, with Visa on board, that will help to ease its path on the approval front, which would then position it to launch X Money in the U.S. sometime this year.
Though it remains a small-scale launch, in the U.S.-only, and securing full approval in other regions could prove difficult.
A key impediment here could be Musk’s own political positioning, which has put him at odds with many government and regulatory bodies around the world. Many of these decision-makers would be unlikely to allow X to enable payments, and gain more influence in their respective regions.
As a result, while X may be getting closer to launching payments in the U.S., that would only be relevant to around a fifth of the app’s users, with a long way to go in securing broader approval.
Though that’s the pessimistic view, the optimistic angle is that this will take X a step closer to Elon’s broader vision for a payments-centered app, from which many more opportunities will rise.
Elon’s “everything app” vision for X mirrors the ubiquity of WeChat in China, with Chinese users effectively using WeChat as their digital identity for all kinds of transactions.
Back in the year 2000, when Musk was working in the emerging digital payments space, he came up with the first outline of his “everything app” plan, which he initially pitched as a future roadmap for the development of PayPal. The PayPal team didn’t go with this, but it’s stuck with Elon ever since, and he remains dedicated to the potential of the concept as a transformative shift in the banking/payments space.
X Money is the first key step in this bigger plan, elevating X from a social media app, to a core utility, which people use to make payments, both on and offline, and also shop, pay bills, do their banking, etc.
That’s how the “everything app” takes shape, though it is also worth noting that other platforms have tried the same approach, with little success.
Meta has also tried to follow WeChat’s lead, and establish Messenger as a foundational framework for transactions (twice, in fact), but it never caught on with Western consumers, while it’s also tried payments on WhatsApp in emerging markets, but has been met with regulatory pushback.
As such, it doesn’t seem like the prospects for Musk’s vision are that great, even if X can eventually facilitate payments, backed by Visa or not. And again, with the broader distrust in Musk, and the X platform, I’m not sure that this is ever going to come together as Musk and Co. hope.
But they’re going to give it a shot, and gaining support from Visa is a key step, while it could also be that Musk’s political clout could help it gain favor in some respects, and facilitate more deals to enable X Money in more regions.
Really, it could go either way, but right now, I wouldn’t be too excited about the prospects for X Money. At least not yet.
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