(Bloomberg) — More than three years after acquiring Twitter, Elon Musk says he is close to fulfilling his long-term goal of turning it into an “app for everything” with a new financial services tool he promised to launch to the public this month.
OX Money, a banking and payments platform built within the social network now known as X, is expected to make its initial public access debut any day now, based on the timeline laid out by Musk last month. Early adopters testing the service highlight competitive advantages, including 3% cashback on eligible purchases and a rate of 6% per year on cash balances — around 15 times the national average.
Musk’s new product is also expected to offer free person-to-person transfers, a personalized metal Visa debit card with the user’s @ in the X, and an AI concierge created by xAI, Musk’s artificial intelligence startup, that tracks spending and organizes past transactions, according to reports from early access users.
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Musk, who rose to prominence in Silicon Valley by co-founding PayPal Holdings Inc., sees payments as a crucial piece in creating a so-called super app, similar to social products that have thrived in China. WeChat, for example, allows you to call a car, book a flight and pay your credit card bill. As Musk told employees in February: “We want it so that if you want, you can live your life on app X.”
If successful, X Money will sit at the intersection of social media and finance in a way that no American product has attempted on this scale. However, the super app model has yet to take off in the United States. Several key details about Musk’s payments project also remain unclear, including pricing, the full set of features and the date it will be widely available.
Musk is known for making bold promises and missing his own deadlines. In this case, he faces regulatory headaches and delays: X Money still doesn’t have payment licenses in several states, including New York, where lawmakers question whether the billionaire should be trusted with people’s money.
Customer rewards are also still unknown. While X Money’s potential 6% fee beats rival personal finance services from SoFi Technologies Inc., Block Inc. and LendingClub Corp., Musk’s company hasn’t said whether that fee will be permanent or promotional. An X spokesperson did not respond to requests for comment.
Richard Crone, founder of Crone Consulting LLC and industry veteran who has followed the payments market for years, is skeptical about X Money’s prospects.
“He promised this vision over two years ago and said they would have it within a year,” Crone said. “This could be a classic case of ‘too late and not enough money’.”
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Missing resources and missed deadlines
Musk has advantages that few fintech founders can claim: a platform with 600 million monthly users; a captive base of content creators who already receive payments via X; and its own track record in building a pioneering payments service.
Creators who are currently paid by X based on engagement will be migrated from Stripe to X Money as their payments platform, according to early adopters — a move that ensures an initial base of active accounts.
Some have already been testing X Money to send payments to each other via the app’s chat feature or directly via their profiles, according to participants in the initial launch phase. It is unclear what would happen to a user’s X Money account if their X profile is banned or suspended.
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Although payments peer-to-peer While they are a popular feature in everyday use, they often serve as a low-margin or even loss-making product for the companies that offer them, said Harshita Rawat, senior research analyst at Bernstein Institutional Services LLC. The real prize comes when you can convince people to do the rest of their banking on the same platform, including credit purchases and loans.
“Becoming the primary bank account is difficult,” Rawat said. “I’m not saying it’s impossible, but you have to find an angle on it.”
Some payments industry veterans see a more basic problem: X doesn’t yet have the infrastructure necessary to make shopping on the platform a frictionless process — a prerequisite for any app that wants to handle real commerce.
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“It doesn’t have a one-click buy button, and it needs that — or on-site e-commerce is going to get left behind,” Crone said.
Musk’s timeline for the project was also being delayed by regulatory obstacles. Operating a payments platform in the US requires licenses in all 50 states, and Musk underestimated the process. At an all-hands meeting in 2023, he predicted that X would get the necessary approvals “in the coming months.” OX currently holds licenses in 44 states, according to its website, and will likely not be able to operate in states where it has not yet obtained authorization.
In a letter sent last year, then-New York State Senator Brad Hoylman-Sigal and State Representative Micah Lasher asked the state Department of Financial Services to deny Musk’s request. They cited the “pattern of reckless conduct in both business and government that has put consumers at risk,” including Musk’s role in dismantling the Consumer Financial Protection Bureau while heading the Department of Government Efficiency.
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Documents and emails obtained by Bloomberg through freedom of information requests show that state regulators also demanded detailed explanations about X’s business model and security features, with lawyers for the company answering multiple rounds of follow-up questions. In at least one case, regulators expressed concern about Musk’s early record at the helm of X, when he cut much of his staff, including many who worked on security initiatives.
A payments regulator in Texas sought input from other states while reviewing the company’s June 2024 application, saying it had “some concerns” with X’s request, according to the emails. Specifically, the regulator wanted to discuss “Mr Musk’s troubled history with the SEC” as well as “the financial situation of X Payments LLC’s parent company, X Corp.”
The request led to a multistate conference call in the summer of 2024, according to the emails and a person familiar with the discussions. Texas approved X’s request three months later.
In early April, Senator Elizabeth Warren of Massachusetts — a frequent critic of Musk — sent a letter to him raising questions about X Money’s pay savings, its banking arrangements and broader concerns about the tool’s impact on the financial system.
“Your failure to operate X safely and responsibly does not inspire confidence in your ability to safely enter consumer finance,” he wrote. OX is still awaiting a payments license in Massachusetts.
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