Last year, Elon Musk made a bold prediction about the future of his social media platform.
Instead of just being a place where people shared thoughts and content, X — rebranded from Twitter a few months earlier — would become a payments super app.
“It would blow my mind if we don’t have that rolled out by the end of next year,” Musk said in October 2023.
Now, however, those plans appear to have stalled, according to a recent Ars Technica report.
Part of the problem, the report said, stems from a legal threat earlier this year in a case that predates Musk’s ownership of X. The company had sought a payments license in New York after getting money transmitter licenses in 38 states, including California.
But its efforts in New York stalled when New York City law firm Walden Macht Haran & Williams (WMHW) sent an open letter to attorneys general and banking commissioners in all 50 states in September 2023, arguing that X be considered “unfit” for a money transmitter license.
The firm had sued Twitter for helping Saudi Arabia carry out a “long-running campaign of transnational repression,” and claimed Musk deepened the company’s ties to the kingdom after he took ownership.
According to the report, X withdrew its money transmitter license in April of this year, per information from the New York Department of Financial Services.
While the reasons aren’t clear, the report quotes Daniela Hawkins, payments expert for tech consultancy Capco, who said that X pulling its New York license would suggest the company wasn’t ready to launch X Payments, as New York City is such a massive market.
“If you roll it out with handcuffs on it, it’s gonna have a bumpy launch,” Hawkins said. “So why would you do that?”
As PYMNTS has written, there are some signs that consumers are interested in digital-only channels from non-bank providers for their payments and financial services needs.
“The read across here is that should platforms and services like X add dedicated accounts to their offerings, they might see increased payments activity and an onramp to loans and high-yield savings accounts,” that report said.
Still, trust is a key concern, and consumers make decisions in this area based on whether they think their data is safe. PYMNTS Intelligence research has found that nearly 6 out of 10 consumers have said they trust primary banks to safeguard their information, compared to PayPal at 49% and FinTechs at 3%,
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