A lesser man would look at the battered fintech landscape and say, “Party over, oops, out of time.” But not Elon Musk! Musk is going to party like it’s 1999, with his new toy called Twitter.
At the start of 1999, Musk was emailing me about his plans to remake banking with a startup called X.com — plans that accelerated when he merged it with another startup that eventually became PayPal. On Wednesday, he talked up strikingly similar ploys in a Twitter Spaces chat.
Musk had been saying for a while that he wanted to turn Twitter into a super app, a do-it-all service called X that encompassed communication, news, shopping, and payments. These apps have been successful in China — think WeChat — but not so much elsewhere, though that hasn’t stopped American tech companies from trying .
- What’s most remarkable about Musk’s plans for Twitter is that they sound an awful lot like his X.com playbook from the turn of the millennium: $10 bonuses for new accounts, high-yield savings accounts, sending money to other accounts, and eventually checking accounts and debit cards. (For kicks, I dug up a filing for what was briefly called the “X.com U.S.A. Money Market Fund.” Retro!)
- Musk argues that people who are paying Twitter $8 a month for Twitter Blue or earning money from new creator features will decide to just stash their cash with Twitter.
- Twitter seems serious: It’s registered with FinCEN, which helps oversee money transmitters. (There are a lot of licenses required to be in the money business, as Musk and his compatriots learned the hard way at PayPal.)
- Oh, and the X.com domain? Musk bought it back from PayPal in 2017.
- One problem with his scheme: Those $10 bonuses for new accounts? Even the modern PayPal, which tried using them again last year to boost its user numbers, found that they attracted fraudsters. Can you imagine what the spambots will do if Musk waves cash money in their silicon faces?
There’s a bigger problem, though: Musk’s wannabe super app faces a ton of competitors that didn’t exist two decades ago. One of the chief ones is run by someone close to him.
- Under Jack Dorsey, Cash App has become a major growth engine for Block. It already has those banklike features Musk is talking about. A lot of rappers, celebrities, and porn stars like to tweet their Cash App handles, or “cashtags,” which start with a dollar sign instead of a hashtag.
- Dorsey supported Musk’s bid for Twitter and rolled his stake into Musk’s new company, so Musk’s competitive push seems like a particularly unkind form of payback. But hey, it’s SIlicon Valley and if you can’t shiv your friends, who can you shiv, really?
- Anyway, rising rates have surprisingly boosted the fortunes of some neobanks, since consumers now have more of a reason to hunt for yield and consider dumping their paleobanks. If there’s a time to try an X.com revival, it’s now.
The biggest challenge Musk’s super app may face is Musk. He has a famously short attention span and he’s already careened from one idea to another in his mission to reinvent Twitter. As PayPal learned, getting people to trust you with their money requires painstaking attention to detail, from the design of a checkout button to fraud-catching algorithms. Musk hasn’t been in that business for decades. There’s a lot he missed the first time, and a lot he has to learn. And there is little sign that he has the patience required.
