To turn the business around, Twitter recently filed for regulatory licenses across America and has begun creating innovative software capable of processing payments on the platform. Spearheading this mission is the tech billionaire Elon Musk. Also, the tech billionaire stated that he wants the payment platform to use fiat first, and then cryptocurrencies would be added later.
Esther Crawford, a prominent figure closely related to Musk at Twitter, is currently putting together the technical structure required for payments on the platform. Two reliable sources familiar with Twitter’s plans have revealed this information.
Twitter’s new payment service
As part of his scheme to generate additional income, Elon Musk is taking steps towards allowing payments on the site. Since he bought Twitter for $44 billion in October, its yearly advertising revenue of $5 billion has abruptly dropped due to advertisers’ worries about moderation and management issues.
Elon Musk has expressed his vision of Twitter evolving into an “everything app” that includes messaging, payments, and e-commerce capabilities—such as peer-to-peer transactions, savings accounts, and debit cards. It is essential to know that Musk’s journey in the financial technology sector began in 1999 when he co-founded X.com, which eventually became a part of PayPal, one of the earliest online banks.
Crawford is forging ahead with her plans, including designing a safe and secure vault to store user data collected by the system, as reported by the two individuals familiar with her team’s progress.
As Twitter moves closer to launching a payment service, they are ensuring all regulatory requirements and checks are in place. Recently, they registered with the US Treasury as a payments processor, according to their filing. Additionally, it has been reported that some state licenses needed for launch have already started being applied for by the company.
The Twitter team added that the remainder would be filed shortly, and licensing would be completed within a year. Twitter also plans to get regulatory approvals in other countries, to expand its services worldwide.
Twitter Payments LLC was established in August of last year before Musk took over the company, and Musk then appointed Crawford—Twitter’s director of product management—as its chief executive. However, for Musk’s vision to become a reality, many technological obstacles must be overcome; not only that, but sufficient compliance is necessary, along with gaining consumer trust.
Last year, Elon Musk approached Twitter’s investors to secure funding for a massive acquisition of programmers to create a “super app” that could process payments. According to one investor who received the offer, this endeavor is likely to be an expensive venture.
Regulatory concerns
FXC Intelligence data revealed that many Twitter users share links to third-party payment services in their tweets or accounts. Lucy Ingham, the head of content at FXC Intelligence, proclaimed: “Twitter is already functioning as an advantageous platform for payments processing—it’s almost a no-brainer.” Nevertheless, some other payment specialists are still skeptical if Twitter can grow fast enough to compete with existing powerhouses such as Venmo, Cash App, and Zelle in the US market.
Twitter’s foray into payments has sparked regulatory concern due to Musk cutting more than half of his employees, leaving some wondering whether they have enough compliance staff.
Any company that deals with money transfers, currency exchange, or cashing cheques must report any unusual activity to the relevant authorities.
An expert and senior equity analyst at the research company MoffettNathanson, Lisa Ellis, reported that user accounts must be directly linked to an individual’s identity to monitor fraud and suspicious transactions properly. This necessitates a large investment of time, money, and resources for tech companies, as compliance infrastructure must constantly remain licensed. As such, many end up giving up on this process because the long-term risk is too burdensome.
