By
Steve Muchoki
April 24th, 2024
Twitter is eyeing to introduce fiat payments first and then integrate crypto assets in the near future.
Twitter is preparing to become a scalable Web3 platform as an FT report indicates the company is applying for regulatory payment licenses across the United States. Additionally, the Elon Musk-owned platform is developing the needed software programs to ensure seamless payment services. Musk is working to widen revenue collection avenues for the $44 billion company, which has been marred by a series of layoffs in the last three months.
Payment Features on Twitter
Initially, Twitter heavily relied on advertising as a sole means of revenue collection, around $5 billion a year. However, Musk noted that Twitter was not sustainable with advertising revenue alone. Moreover, apart from the competition from other social media giants like Meta Platforms Inc (NASDAQ: META), the advertisement industry has significantly shrunk post Covid due to business failure and supply chain bottlenecks.
According to the report by FT, Twitter is eyeing to introduce fiat payments first and then integrate crypto assets in the near future.
As a result, the Dogecoin community, which is highly incentivized by Musk’s tweets, began speculation on the matter. According to market data provided by Binance-backed Coinmarketcap, Dogecoin’s price is up 3 percent on the last day to trade around $0.09429. Interestingly, Dogecoin’s 24-hour traded volume spiked 148 percent to $1,121,795,134 on Tuesday.
Musk is reportedly working on an everything app, with Twitter’s acquisition acting as an accelerant by a factor of three years. Basically, Musk is developing a Web3 platform similar to WeChat in China. As part of the master plan, Musk intends to introduce Twitter users to peer-to-peer transactions, savings accounts and debit cards.
Buying Twitter is an accelerant to creating X, the everything app
— Elon Musk (@elonmusk) October 4, 2022
Twitter and the Market Outlook
Reportedly, Musk intends to have Twitter bring in about $1.3 billion in payments revenues by 2028. The plan, however, requires more money to hire software developers and ensure a proper regulatory framework is instilled. By leveraging its rising global monthly active users, the company is well-poised to earn more revenue through payments.
“Twitter is already a platform on which payments happen, so it’s kind of a no-brainer,” said Lucy Ingham, head of content at FXC Intelligence.
Nonetheless, the social media platform will have to convince users of the utmost security higher than competitors like Venmo, Cash App, and Zelle. Furthermore, most of the existing payment applications already support what Musk is doing with Twitter and at scale. As such, Musk will have to convince users of a better service than competitor payment platforms.
Nevertheless, Musk has a reputation for growing tech companies consistently to billion-dollar revenue.
“Many tech companies experiment and then give up”, Lisa Ellis, a payments expert and senior equity analyst at research company MoffettNathanson, said. “They find it to be a burden to ultimately bear the long-term investment and risk – where you can get fined if there’s an issue and you have to have a whole compliance infrastructure that has to be constantly licensed.”