Elon Musk will have his work cut out for him if he wants to turn Twitter into a payments service, as seen by a brief tour of his PayPal days.
Twitter’s ambitions according to Elon Musk
Elon Musk has rekindled his ambitions for a so-called superapp inspired by Chinese internet giant Tencent by providing further insights about his long-term goals for the social network.
In fact, it is anticipated that Twitter will achieve positive cash flow during the second quarter. In an hour-long live chat with Morgan Stanley CEO Michael Grimes, Musk made this statement.
This would be a significant reversal for Twitter, which suffered a $270 million loss in the second quarter of 2022, the final period in which it was required to report financial results before Musk took the business private.
Musk spent the most of the conversation praising Twitter advertising, but he made no mention of the company’s primary business revenue.
Which, as you may recall, suffered recently when many advertisers reevaluated their partnership with Twitter following Musk’s decision to eliminate the content moderation unit and enact a variety of contentious rules.
One thing Musk had in common with him was his vision for Twitter, which was to make it an app for everything. Musk often mentioned this idea in the latter part of last year.
a decision motivated by WeChat, a well-liked software from Tencent that lets Chinese users book appointments, purchase groceries, and hail cabs. Musk stated that he thinks X/Twitter has the potential to grow into the greatest financial institution in the world, where app users can send money to one another “effortlessly with one click” and earn interest.
Twitter for Elon Musk similar to PayPal?
The largest online payments firm in the world, PayPal, processed $1.4 trillion worth of transactions in 2016. On the other hand, according to a Wall Street Journal story published last week, Twitter’s income dropped 40% in December.
Once Musk’s $44 billion acquisition of the business was finalised in October, the public got its first glance at the company’s financials. Since then, Musk has aggressively reduced costs as the CEO of Twitter, laying off nearly 75% of the employees and even auctioning off office supplies that were deemed superfluous.
Musk believes that his work prevented Twitter from going bankrupt. The fact that Morgan Stanley was one of the seven banks that gave Musk $12.5 billion in debt financing for his acquisition of Twitter is crucial.
Twitter’s debt repayments were not mentioned in the discussion, though. Whatever the case, it looks like Musk is ready to make a move that will expand the company’s capabilities much beyond what a straightforward social network can provide.
He is reportedly interested in transforming Twitter into a payment network that can compete with well-known players like Apple Pay and PayPal, according to stories in the Financial Times.
In fact, Musk hinted at his ambitions to enter the payments industry in part at a meeting with advertisers in November of last year, foreshadowing plans to let Twitter accounts send money to one another within the social network.
There has been no additional communication after that moment, but the most recent speculations indicate that the project has changed and Twitter is currently asking for the appropriate licences to operate as a payment platform in the US.
Meanwhile, work is also being done on the infrastructure of the new service, and it appears that Elon Musk wants to take things a step further by making Twitter into an all-in-one platform, which would allow it to provide, as we will see in a moment, a much wider range of services than it does at the moment.
The specifics of Elon Musk’s proposal for a Twitter that resembles PayPal more
Musk apparently discussed the subject in-depth with his shareholders as well. As part of a detailed plan to provide a new app that can combine communications, payments, and commerce, he would specifically include features like peer-to-peer transactions, savings accounts, and debit cards.
There are suspicions that the site may eventually include support for cryptocurrencies after initially supporting just conventional currency and payment methods.
In addition to facilitating online and in-store payments, the platform will also propose to offer money transfer services between users, which would open the door for further applications that we can only now conceive. This might make the platform a direct rival to PayPal and Apple Pay.
But, Musk is by no means a novice when it comes to such endeavours, and perhaps not everyone will be aware that it was he who launched X.com in 1999, one of the earliest online banks that eventually joined the PayPal payments behemoth.
Will Twitter be able to compete with realities that have dominated this industry for a longer period of time?