Social media platform X, formerly known as Twitter, is preparing to expand its functionality, transitioning from a messaging platform to a fintech service with the launch of X Money.
Launch of X Money with Visa support
X Money is a new digital wallet and peer-to-peer payment service that will launch in collaboration with Visa later this year. Initially available only in the U.S., the service will allow users to tip creators, purchase merchandise, store value, and even trade or invest, all within the app. According to CEO Linda Yaccarino, users will be able to manage their 'whole financial life' on X.
Regulatory and advertising hurdles
Despite the positive outlook, X faces regulatory challenges. The shift into finance may attract increased scrutiny regarding licensing and compliance. Among advertisers, tension remains: while Yaccarino claims 96% of former advertisers have returned since 2022, some are still hesitant due to concerns over toxic content and doubts about the platform’s ability to achieve its stated goals.
Musk's xAI deal raises concerns
The situation is complicated by Musk’s recent sale of X to his AI venture xAI for an $80 billion all-stock deal. This has raised legal and financial issues, especially after a judge declined to dismiss a shareholder lawsuit tied to Musk's original acquisition. Critics argue that the deal may have been overvalued to shift liabilities and data under the AI firm, raising numerous questions.
X's transition to financial services marks a significant step in the platform's development. However, the company faces a number of regulatory and advertising challenges, as well as fallout from recent deals.
