X Money, a banking and payment platform integrated within the social network now referred to as X, is anticipated to make its early public access appearance soon, aligning with the timeline provided by Musk last month. Early users testing the service have highlighted enticing benefits, such as 3% cash back on qualifying purchases and a 6% interest rate on cash savings — a figure approximately 15 times the national average.
Musk’s innovative product is also expected to facilitate free peer-to-peer transfers, along with a personalized metal Visa debit card featuring a user’s X handle, and an AI concierge developed by Musk’s xAI startup, which monitors spending habits and organizes past transactions, as per reports from those with early access.
Having first gained prominence in Silicon Valley as a co-founder of PayPal Holdings Inc., Musk recognizes that payments are essential for building a super app analogous to social platforms that have thrived in China. For instance, WeChat allows users to book rides, flights, and make credit card payments. As Musk conveyed to employees in February, “We want it to be such that, if you want to, you could live your life on the X app.”
If successful, X Money would blend social media and finance in a manner no American product has attempted on this scale. Nonetheless, the super-app concept has not yet gained traction in the US. Several important aspects of Musk’s payments project remain ambiguous, including pricing, a comprehensive list of features, and the timeline for widespread availability.
Musk is known for bold assurances that often miss their intended timelines. In this situation, he faces regulatory complications and delays: X Money currently lacks payment licenses in several states, including New York, where lawmakers have raised concerns about entrusting the billionaire with public funds.
The potential customer rewards remain uncertain as well. Although X Money’s projected 6% savings rate would surpass competing consumer finance offerings from SoFi Technologies Inc., Block Inc., and LendingClub Corp., Musk’s company has yet to clarify whether that rate is ongoing or promotional. An X spokesperson did not respond to requests for comments.
Richard Crone, founder of Crone Consulting LLC and a seasoned observer of the payments sector, expresses skepticism regarding X Money’s future.
“He promised this vision more than two years ago, and claimed it would be ready within a year,” Crone noted. “This could be a day late and a dollar short.”
Missing features and deadlines
Musk enjoys unique advantages that few fintech founders possess: a platform boasting 600 million monthly users; a dedicated community of content creators already compensated through X; and his prior experience in establishing a groundbreaking payments service.
Creators who currently receive payments from X for their engagement will transition from Stripe to X Money as their payment processing system, according to early users — a strategy that ensures an initial base of active accounts.
Some have begun testing X Money by transferring payments to one another through the app’s chat feature or directly via their profiles, as shared by participants in the initial rollout. However, it remains unclear what would happen to a user’s X Money account if their X profile is banned or suspended.
While peer-to-peer payments are popular for everyday transactions, they are typically a loss leader for businesses that facilitate them, noted Harshita Rawat, a senior research analyst at Bernstein Institutional Services LLC. The real incentive comes when users are encouraged to conduct the majority of their banking through a platform, including credit purchases and loans.
“Establishing itself as the main bank account is challenging,” Rawat remarked. “That’s not to say it’s impossible, but an appealing angle is necessary.”
Others in the payments industry identify a more fundamental challenge: X still lacks the infrastructure needed to make transactions on the platform seamless, which is essential for any app aiming to engage in real commerce.
“He lacks a one-click purchasing option, which is crucial; without it, e-commerce on his site will falter,” Crone stated.
Musk’s timeline for the initiative has also faced multiple setbacks due to regulatory obstacles. Operating a payments platform in the US necessitates licenses from all 50 states, and Musk underestimated this process. During a 2023 all-hands meeting, he anticipated that X would secure the required approvals “in the next few months.” Currently, X holds licenses in 44 states, according to its website, and may be unable to operate in states where it has not obtained a license.
In a letter sent last year, then-New York state senator Brad Hoylman-Sigal and assembly member Micah Lasher urged the state’s Department of Financial Services to reject Musk’s application. They cited his “pattern of reckless conduct, in both business and government, that has put consumers at risk,” including Musk’s involvement in dismantling the Consumer Financial Protection Bureau while presiding over the Department of Government Efficiency.
Documents and emails obtained by Bloomberg through public records requests reveal that state regulators have demanded comprehensive clarifications regarding X’s business model and security features, with attorneys for the company often responding to multiple rounds of follow-up inquiries. In at least one instance, regulators expressed concern about Musk’s early management of X, wherein he reduced the workforce, including many responsible for safety measures.
A payments regulator in Texas sought input from other states while reviewing the company’s application in June 2024, voicing “a few concerns” related to X’s request, according to the emails. Specifically, the regulator wished to discuss “Mr. Musk’s troubled history with the SEC,” along with the “financial condition of X Payments LLC’s parent company, X Corp.”
The request resulted in a multi-state conference call during the summer of 2024, according to the emails and a source familiar with the discussions. Texas approved X’s application three months later.
Earlier in April, Senator Elizabeth Warren of Massachusetts — a frequent critic of Musk — sent a letter to him, raising questions about X Money’s yield economics and its banking relations, as well as broader concerns regarding its implications for the financial system.
“Your inability to operate X in a safe and responsible manner does not inspire confidence in your capacity to safely expand into consumer finance,” she remarked. X is still waiting for a payments license in Massachusetts.
