By now, you’ve probably heard about Elon Musk’s grand plan to transform the X (formerly Twitter) social media platform intoAll apps” One of the main pillars of Musk’s reimagining of X includes Payment platform Much like PayPal or Venmo.
new files obtained Bloomberg Not only does it reveal Musk’s financial services vision for X, it also reveals how serious the company’s financial troubles have been since it acquired X in October 2022.
The new documents were prepared by The documents also provide the public with the first official look at the company since Musk took it private.
X’s income dropped significantly
Now that X is no longer publicly traded, we no longer know much about the company. For example, most reports of X’s revenue problems come from internal leaks.
However, these new documents make it official: According to X, the company’s revenue has plummeted since Musk took over.
In the first six months of 2023 (Musk’s first full year in control of the company), X’s revenue fell nearly 40% from the same period last year. During the period, the company generated revenue of $1.48 billion. Additionally, X lost $456 million in the first quarter of 2023.
Mix and match speed of light
Much of the revenue decline is likely to be Attributed to X’s Advertiser’s Dilemma. Before Musk took over, when the platform was called Twitter, advertising often accounted for up to 90% of the company’s revenue. Under Musk, ad revenue has fallen as advertisers have fled the platform due to changes and various controversies involving its owners.
Musk pushes for financial services
X is looking to launch a payment service system on its social media platform. The company filed documents with 11 states seeking money transmitter licenses.
The company hopes to provide users with a PayPal/Venmo-like feature called X Payments. The plan is to allow users to pay other users, purchase products and services, and store funds through their X Accounts.
Musk has floated some ideas to make up for lost advertising revenue. For example, X launched the X Premium subscription plan as well as a subscription service for creators. Neither service can narrow income gap Advertisers left behind.
However, according to the documents, X planned to use the X Payments service primarily to achieve “increased engagement” on social media platforms. X Payments does not plan to charge fees for most of its services.
The idea of X Payments was previously proposed by Musk. In previous comments, Musk said he wanted users to be able to open savings accounts on X at “extremely high yields.”
according to BloombergBefore Musk acquired the platform, Twitter at the time actually merged its payments business in February 2022. Subsidiary X is now called X Payments and has its own board of directors and management team. While X currently has business relationships with payment processors such as Stripe and Adyen and banks such as Citibank, it is unclear whether X will partner with these companies to provide X Payments services.
And, for cryptocurrency advocates, this is bad news. According to reports, X Payments currently has no plans to incorporate virtual currencies such as cryptocurrencies into its business.
