Last October 2022, Elon Musk, founder and CEO of Tesla and SpaceX, purchased the social media platform Twitter for $44 billion. Musk’s approach to running Twitter was initially described as “move fast and break things” and “slam on the gas pedal,” as seen in the plethora of upheavals the company experienced immediately following Musk’s purchase: within days, half of their employees were laid off and thousands other resigned, and many major advertisers left the platform. This summer, Musk officially started his rebrand of Twitter, most notably by changing the platform’s name and logo to X.
Through these chaotic changes, Musk has begun to shift the platform away from being focused on social networking and towards becoming a payments and software platform instead. In fact, only one month after purchasing Twitter, in November 2022 he started filing paperwork with the Treasury Department’s Financial Crimes Enforcement Network to do just that. As of August 2023, Twitter-now-X has acquired seven money licenses from the states of Maryland, Georgia, Rhode Island, Arizona, Michigan, Missouri, and New Hampshire, which is a crucial step in building a nation-wide payments platform. Insiders say that as a payments app, X will focus first on fiat currency transactions but eventually integrate cryptocurrency functionality as well.
If you haven’t been paying very close attention to the story, these recent events may seem bizarre. But if you dig a little deeper into Musk’s history, you’ll find that it has long been his goal to create a super app. In 1999 Musk founded an online bank called X.com that he hoped would become a “a one-stop everything-store for all financial needs: banking, digital purchases, checking, credit cards, investments, and loans.” Although the original X.com later merged with another company (which became the well-known PayPal) and never blossomed into what Musk had hoped it would be, his vision certainly didn’t die. If you’ve been following him on X.com, you’ll know that his dreams for a super app called X are moving forward again with this “little” platform formerly known as Twitter.
So what’s the plan? How will Twitter actually turn into a payments app, and then ultimately a super app? Besides continuing to acquire money licenses from different states, Musk recently announced that X.com may soon require a small monthly subscription fee for all users, not just those who have opted into X’s Premium subscription. At the moment, X Premium is essentially the equivalent of what was previously Twitter Blue, but also allows users to have NFTs as their profile pictures and also gives them early access to “new features,” which presumably will have to do with payments and other super app components. The purpose of charging everyone a fee to use the platform? In a recent live streamed conversation with the prime minister of Israel, Musk said “It’s the only way I can think of to combat vast armies of bots” which are currently active on X.com. And bots definitely could affect X’s aim to have “comprehensive communications and the ability to conduct [users’] entire financial world.” Other than these changes, the path X will follow to become a super app and not just a communications + payments app is still unclear.
With Musk’s intentions in mind we find ourselves wondering, will his dreams to build a super app actually come to fruition this time around? And maybe the bigger question is, would any financial super app succeed in the United States in 2023 and beyond?
Super apps have become quite popular already in other parts of the world, like in Asia. But the places and markets where super apps have hit it off with the general public are arguably quite different from the United States. Although there are obviously a few giants within the fintech sector in the U.S., competitions between fintech companies remains high (hence a prevalent start-up culture). Many fintechs exist today because of their ability to specialize in very specific areas or services. This reality alone makes us wonder if any one of them is capable of becoming “the best” at enough different services to succeed as a super app. In addition, the average American has over five different bank accounts and uses multiple financial apps regularly. Although it may sound less complicated to have all your financial entities and services tied into one app, most Americans have proven that they’re more interested in having variety and choice. In our opinion, a super app doesn’t stand much of a chance in that kind of environment.
So, will former Twitter become what Musk hoped X.com would become back in the early 2000s? We won’t be surprised if it does. Will it be a hit? We suspect it won’t be, but only time will tell.