SAN FRANCISCO—X, the social media platform owned by Elon Musk, is preparing to roll out early public access to “X Money,” a banking and payments service that aims to combine peer-to-peer transfers, savings and spending tools within the app.
Early users testing the platform have reported features that include the ability to send money directly through chat or user profiles, along with financial incentives such as 3% cash back on eligible purchases and interest rates of about 6% on cash balances—well above the national average, the National Post reported.
The service is designed to expand beyond basic payments into a broader suite of financial services, including savings accounts and, potentially, credit and lending products. Industry analysts told the National Post that while peer-to-peer payments can attract users, long-term success will depend on whether X can become a primary banking platform.
The Challenge in Being the PFI
“Becoming the primary bank account is hard,” said Harshita Rawat, a senior research analyst at Bernstein Institutional Services LLC, according to the report. “I’m not saying it cannot be done, but I think you need to figure out an angle for that.”
Some payments experts cited by the National Post said X still faces challenges in building the infrastructure needed to support seamless commerce, including a streamlined “one-click” purchasing experience that is common on other platforms.
The rollout has also been slowed by regulatory requirements. Operating a payments platform in the United States requires licenses in all 50 states, and X currently holds approvals in 44 states, according to the company’s website, the National Post reported. The company is expected to be unable to operate fully in states where licenses are still pending.
‘Significant Scrutiny’
Regulatory scrutiny has been significant, with state officials requesting detailed information about X Money’s business model, security protocols and financial backing, according to documents obtained by Bloomberg and cited by the National Post. Concerns raised by regulators have included Musk’s past dealings with the Securities and Exchange Commission and the financial condition of X’s parent company.
Political opposition has also emerged. U.S. Sen. Elizabeth Warren questioned the platform’s economics and safety in a recent letter to Musk, while New York lawmakers previously urged regulators to deny the company’s application, citing concerns about consumer protection, according to the report.
Despite those hurdles, X has continued to move forward with approvals in multiple states, including Texas, which granted a license after coordinating with other regulators, the National Post reported.
Uncertain Timeline
The timeline for a broader rollout remains uncertain, but Musk has indicated the service could launch publicly in the near term as the company seeks to expand from social media into a full-service financial platform.
