Musk’s X Money Begins to Show Its Cards
X has struck the first of multiple payment arrangements with Visa to get into person-to-person payments. But obstacles remain … and we're not talking just about regulation.
By Steve Cocheo, Senior Executive Editor at The Financial Brand
Perhaps fittingly, news about payments developments coming at X — which people still have to correct themselves over for calling it "Twitter" — tends to be very short.
After teasing X Money at the end of December, and then briefly referring to it on stage at CES 2025, CEO Linda Yaccarino posted on Jan. 28:
"Another milestone for the Everything App: @Visa is our first partner for the @XMoney Account, which will debut later this year. …" followed by three attributes of the arrangement.
Contacting Visa’s public relations team for details resulted in a terse reply — to look at its own post on X. This was simply: "We’re excited to partner with @XMoney on the launch of X Money Account. Visa Direct will make it possible for US X Money Account users to fund and transfer money in real-time with their debit card."
The reason for the terse announcement might have been that Visa was set to announce first quarter fiscal 2025 earnings two days later, well within the "quiet period" publicly held companies generally observe before earnings.
On LinkedIn, Jim Filice, Visa’s vice president and head of real-time payments and Visa Direct, posted a picture of Yaccarino’s X post, and said — with some intriguing hashtags: "This one has been fun for many reasons! An exciting announcement, making Visa Direct the #realtime #moneymovement rail chosen to move money into, and out of, the XMoney "Everything App".
#instantaccountfunding #P2P, #neobanking #neobrokerage #everythingapp
One inference is "debut later this year" won’t happen before April — that is, if Visa sticks to its mid-December announcement that funds transferred to U.S. banks via Visa Direct will be available within one minute or less starting April 2025.
Yaccarino has been beating the drum in posts and other venues that platforms like X are the new news media, the replacement for legacy publications. So it’s not a surprise there was no news release, no formal announcement.
Still payments industry observers poked among the morsels for clues about what they mean and will mean and what could be next. As X owner Elon Musk’s influence on the social platform grows, and his visibility on the national stage increases, every tidbit is news, but not necessarily hard information.
"We’ve been following this closely for probably over a year now, and we still know very little," says Grace Broadbent, senior analyst, payments, at eMarketer.
Not much more came out during the later earnings briefing, either
"Through the partnership, X Money will utilize Visa Direct to enable secure and instant funding of their X wallet with a user’s debit card. Users will also have the option to instantly transfer funds back into their bank account via the same debit card," Visa CEO Ryan McInerney said in introductory remarks.
When Deutsche Bank’s Bryan Keane probed further, asking how quickly the partnership would be active and how quickly volume would grow, McInerney spoke generally and gave no specifics, and moved on quickly. He did say that X creators, who already get compensation from the platform, would be paid faster via Visa Direct when they move the payments back into their bank accounts. In the course of the briefing it was clear that, to Visa, the deal is one of multiple use cases with fintechs and others underway for Visa Direct. (X’s Creator Revenue Sharing program is currently processed by Stripe, which provides creator comp programs to other platforms as well.)
Payments analysts interviewed by The Financial Brand generally focused on the P2P possibilities of the pending X Money "everything app," which has been a dream for Musk even before he bought Twitter. Another element in the mix is social commerce — purchases made on social media platforms or from links after buyers see promotions by influencers, often in the form of short videos. Out of the major social channels, other than compensating creators, X has not exploited this payments application. Payments consultant Richard Crone calls it a "greenfield opportunity" for embedded payments because "shoppertainment combines entertainment and ecommerce, creating a viral loop."
Read more: Why Elon Musk Wants to Disrupt Banking Next
Bringing Payments into Elon Musk’s Social Media App
"I’m kind of surprised at the amount of surprise that people are expressing about X doing business with Visa," says Peter Tapling, managing director of PTap Advisory, as the scanty news spreads. "At the end of the day, Visa has always articulated that their business is to be in the middle of every payment everywhere for everyone. If there’s a wallet out there, they want to work with it. If X is going to become a wallet, then Visa wants to be in there supporting it in some way."
Clearly, Visa providing a fast on and off ramp connecting X’s wallet and bank accounts is one of multiple functions that the would-be everything app will need to deliver, says Crone. "You have to have an envelope, to hold all of the ingredients, first," Crone explains.
Lily Varón, principal analyst at Forrester, admits to some puzzlement. In spite of a head start and some definite payments strengths, "if PayPal hasn’t succeeded thus far in its attempts to become this invaluable U.S. super app, given its addressable market, why would X be successful?"
Continuing, Varón says that she’s "both underwhelmed by this news and yet full of thoughts." Visa’s presence makes movement of bank funds into and out of X easier, but that by itself doesn’t make a use case.
"If the use case for payments on the platform itself isn’t really urgent or isn’t important nor pressing, it doesn’t really solve a pain point as I think it should," says Varón. "That limits the utility of adopting payments on the platform."
One notable point, she adds, is that using Visa Direct makes it clear that X’s team is not contemplating a closed-loop system like the Starbucks account nor something like "X bucks" or some such social scrip currency.
"Being able to actually move money is a foundational piece to being able to do lots of other things," says Varón.
However, she adds, "there’s not a latent demand for this kind of activity out of X. You may build it, but will they come?"
For X Corp.’s part, in her CES fireside chat, Yaccarino spoke extensively of the widening world of X that’s coming and the "global town square" that X Money will be part of.
Yaccarino made it clear that X is banking heavily on Gen Z — interesting because four or five years ago, what was then Twitter wasn’t necessarily seen as a hangout for that generation. But the platform also used to be a liberal bastion accused of dissing conservative viewpoints — pre-Musk.
Read more: How Affirm, PayPal and Now Musk’s X Money Will Jockey for Gen Z’s Money in 2025
Do People Really Want to Bank and Pay with X?
Both Varón and eMarketer’s Grace Broadbent bring up an even more fundamental issue: trust.
Elon Musk, Linda Yaccarino and company want to create an everything app that includes a wallet containing not only dollars but also, someday, crypto. But are consumers really clamoring to place their money with X?
Broadbent says a key challenge X will have in launching a P2P system is how people may feel about X since Musk took control of it.
"Do people want to trust Musk and X with their payments? Do they feel comfortable storing money in X?" asks Broadbent. "They might feel comfortable enough to post on it and interact with their friends on it. But when it comes to storing their money, that’s going to be a whole other hurdle to overcome."
Broadbent suspects that part of what X hopes to obtain through Visa, beyond its technical prowess, is an element of trust. Americans have known the Visa brand and logo for decades, specifically in a payment context. It is also seen as part of the traditional banking industry in some ways, even though it serves many fintechs now, too.
"It’s very smart that X is partnering with a network like Visa, and that they might have other, future payments partners as well," says Broadbent, "because right now I don’t think anyone would trust X to set up their own system and to run it all by themselves."
Broadbent notes that 2024 research by eMarketer found that X scored second from the bottom in trust of tech and media companies. At the high end, 59% of the sample trusted Amazon with personal data and 54% with financial data. By contrast, 25% trusted X with personal data and 19% with financial data.
The bottom of the ranking? TikTok, with 22% and 18%, respectively.
Read more: P2P Apps Now Dominate Payments Between Individuals, Eclipsing Cash
Will Outsourcing Some Tech Gain Some Confidence?
Tapling points out that X is at heart a technology company. For that matter, Elon Musk is a technologist first and foremost. Tapling says X will have to balance the temptation to build their own tech versus the appeal of partnering with established providers. Yaccarino’s post, reproduced earlier, referencing Visa as "our first partner," may be a "tell" on that point.
Putting aside trust, both Varón and Broadbent point out that established P2P services have a long, long lead on X getting into P2P payments. Each has some established generational affinities, and enjoy strong loyalties. "X is going to have a large barrier to overcome, to find its own niche and get people to move away from their own to X," says Broadbent.
The speed of Visa Direct may be a key ingredient in X’s assault on the established order. Broadbent points out that on Venmo transferring funds to one’s bank account takes one to three days, unless you pay a fee to do it same-day.
"If X is able to offer that speed without a fee, that could be a big advantage," says Broadbent.
For Varón, the ultimate question is how much payments can scale on X, in order to back up the "everything" super-app concept.
Read more:
When Are Social Commerce Payments on X Coming Up?
There is some skepticism about the near-term debut of social commerce payments on X among other interviewees. Some point out that X doesn’t tend to be used for "product discovery," although there may be something of a reverse "chicken/egg" effect there. But payments veteran Richard Crone thinks social commerce payments are closer than you might expect. He said the combined annual growth rate of 40% over the last few years, by one measure, is irresistible for a platform.
The excitement over social commerce payments in general really heated up when TikTok introduced its "TikTok Shop" in 2023.
"TikTok Shop has flooded users’ feeds with shoppable content, prompting more people to shop and buy on the platform," says a December forecast report from eMarketer. Growth in the population of social commerce buyers on TikTok, Instagram, Facebook, Pinterest and others offering the capability in some fashion to buy in or near the channel is expected to have hit 110.7 million people by the end of 2024. Social commerce sales in the U.S. are projected to hit $71.62 billion for 2024, up 26% over 2023, per eMarketer statistics. Much of the growth comes from Gen Z and Millennials, according to the firm’s report — they will represent 70% of social commerce buyers in 2025.
The growth rate in sales will fall, according to eMarketer, as some of the novelty wears off and some buyer remorse from impulse shopping on influencers’ urging comes. But the firm’s numbers don’t include X because the firm hasn’t built up that business — yet.
Crone is convinced that this is an integral part of X’s X Money play.
"X Money aims to compete directly with TikTok Shop by embedding payments into short-form videos, livestream shopping, and influencer-driven ecommerce," says Crone. One big draw for X, which has suffered economically for some time: The "take rates" for processing payments on social commerce channels range from 5%-8%, according to his research. This is higher than traditional interchange fees.
Pulling Visa Direct into the X ecosystem will establish funds that will not only make it easier to buy, but can also "burn a hole" in X users’ pockets, Crone suggests.
A strategic thought for banks and credit unions from Crone: It’s natural to think of any payments channel as competition. He argues that traditional institutions have to think of X Money, to the degree they can, as a place where they have to find a fit. He says this is akin to deciding to pay for access to Apple Pay or Google Wallet.
"Banking players need to ensure their cards are registered with X Money, TikTok Shop and other platforms to stay relevant," says Crone. "Unregistered cards risk being bypassed by emerging ecosystems that increasingly use pay-by-bank, over-the-top, and other alternative processing and settlement schemes."