It looks like PayPal is about to rival an old acquaintance. Looking for new ways to increase Twitter’s revenues, Elon Musk has pushed the button to turn the company into a payment platform.
In a meeting on Twitter Spaces in November last year, Musk talked about his plans to enter the payment market and stated that users would be able to transfer money to others on the social network. Since then, not many details about this plan have been disclosed. However, according to the information reflected in the press, this plan is being actively worked on.
According to the Financial Times, Twitter has begun applying for legal licences across the US and designing the software necessary to initiate payments on the social media platform.
Twitter Product Management Director Esther Crawford is said to be working on the infrastructure of the new service. The report also states that Musk wants to turn Twitter into an ‘everything app’.
Although Twitter’s new payment platform will initially work with normal currencies and payment methods, the company has a plan to integrate cryptocurrencies into the infrastructure in the future. The platform will compete not only with PayPal but also with Apple Pay, which allows money transfers.
Musk was one of the founders of PayPal
New moves to allow payments through the site are a critical part of Musk’s plan to open new revenue streams. Twitter’s $5bn a year advertising revenue (since it bought the platform for $44bn) has been in crisis as marketers have raised concerns about governance and content control.
A series of erratic decisions, such as the reinstatement of banned users, including former US President Donald Trump, combined with the departure of around 5,000 staff, has spooked advertisers. Major companies such as Volkswagen, US food products company General Mills and pharmaceutical company Pfizer suspended their advertising campaigns on Twitter.
Some reports claim that Twitter has lost half of its top 100 advertisers in the last three months. Industry sources have raised concerns about brand safety due to the firing of content moderators.
Of course, it is unclear whether Twitter can compete with companies that have been in this market for much longer. It is also likely that the company will face very strict scrutiny. With all this, Musk will not only need to overcome technological challenges to realise his vision; he will also need to win consumer trust.
Musk was one of the founders of X.com, which was established in 1999 and became one of the first online banks, later becoming part of the payment giant PayPal. PayPal was acquired by eBay a year later, in 2002, for $1.5 billion.