Is Twitter a paying company now? Fintech Industry Response

Elon Musk, managing director i Tesla, crypto afficionado and now newly minted CEO of Twitter recently outlined his ambitious plans to bring payments and other financial features to the platform. Aiming to turn Twitter into an “everything app,” Musk’s vision hit the news in a big way. The idea of ​​a payments company born from a social media app has intrigued those in the industry, and many wonder about the logistics involved.

To find out more about thisThe Fintech Times heard from several fintech executives to discover the industry’s initial reaction, and what some of the challenges Twitter might face if it were to go down the payment company route.

A blue tick for payments?

James Neville, managing director of the payment company Citizen, so: “Without more details, it’s hard to comment much, but we’ll say that payments are an obvious area to watch as Musk moves to improve Twitter’s bottom line. Making it a success, however, ties into some of the key issues that Twitter struggles with: trust and identity. Twitter has a long way to go to (re)establish trust that members know who they’re communicating with, let alone who they can send money to – so there’s a lot riding on the blue check for digital payments to be a success . “

All about trust

Geoff Brownco-founder/managing director of High line agrees that trust is a key factor when considering Twitter’s move to payments.

He said: “Payments are built on trust and recent trends are not good here. Could people trust that a Twitter handle is really the intended recipient? Can regulators trust money laundering controls to be robust? Would people trust Twitter with additional personal information and access to bank accounts? From the transcript of Twitter’s company meeting, it sounds like Musk sees a compatible payment infrastructure as a partial answer to bots and fake accounts, but maybe they need to clean up those issues first.

“On the plus side, Musk understands payments, and there’s a lot of great talent recently available (see Stripe, Chimeet al). The combined savings/credit product he describes is certainly in the Zeitgeist; Nirvana money recently made a big splash unveiling its version of it at Money20/20. With access to 450 monthly active users as a foundation, a savings/credit product combined with P2P payments built into Twitter’s instant messaging could be a game changer. However, this assumes that the company can pull itself together in general. We will have to wait and see.”

Been there done that

Daniela Hawkins, managing principal at the consulting company Capco said: “Twitter and other social media have tried to make payments before. Although these initiatives did not catch on with consumers, there is still a huge amount of opportunity for companies to explore. Consumers in the US still need to log into individual apps to use different toll rails (Venmo, Zelle, Cash App). It’s not the best banking experience. The problem, especially in the US, is that consumers don’t associate social media apps with payments. That makes it a bit of an uphill battle for Twitter.

“Regulatory control will also be an issue. Money movement and banking are highly regulated. Elon Musk mentioned a high-yield savings account. That suggests a banking partnership of some kind. But maybe Twitter is pursuing an industrial loan charter. Or a banking charter. There are still some questions about how this will fit together.”

The built-in finance playbook

Alex Mifsud, managing director, at a provider of embedded finance, Weavr.io, said: “It’s no surprise that Elon Musk is turning to payments to breathe life into Twitter. This would be another example of the new embedded finance playbook: take a high-engagement digital platform and bring the internal value streams in-house.

“As Shopify, Toast and other digital businesses have shown that digital platforms can profitably become highly effective fintechs. Twitter provides a rich foundation – daily active users who generate content, and therefore rich profiles, as well as advertisers who want to match these profiles to their goods and services. Add a layer of identity verification and payments and Twitter candidates to the ultimate electronic bazaar.”

A smart idea

Managing Director of Digital and Cloud Experts CircleIt, Art Shaikh, believes that getting into payments is a smart move for any company right now.

“A lot like WeChat, the move in the industry has been to create super apps, or all-in-one solutions,” he said. “Twitter entering this space is a big deal, as it would be the highest-profile player in the space, and Elon Musk’s celebrity status will help lend credibility to it. However, there are many unanswered questions surrounding security issues. Twitter’s whistleblowers revealed some major security risks at the company, and we have yet to find out if those issues have been addressed by Musk and his team since the takeover.

“When a brand takes on a new venture, it’s important to have the consumer trust the process, and any breach, minor or major, can spell doom in the payments space. I sincerely hope that Twitter focuses on security infrastructure, which should be the starting point for any company. As long as it’s top notch, and this isn’t released hastily, it should be a big win. For now, it’s unclear whether that’s the case or not, as Twitter is run as a startup, which lends itself to a “shoot first, ask questions later” workflow.

Money, money, money

Gökçe GüvenCEO and founder of Colda Web3 company, said: “Elon Musk’s plans to integrate payments into the Twitter platform are apparently driven by a desire for profit and his competitive nature, specifically positioning him against Jack Dorsey and Block (previously The square.) Musk needs to focus on how integrating payments can benefit creators, not the company’s bottom line. It can be done, and cryptocurrency is a big part of the solution.

“If Twitter were to integrate crypto payments and share a weekly percentage of the circulating native token based on the traction that creators’ content attracts, this could spur more participation and creativity on the app. As the current issues surrounding Twitter Blue verification drive users away, this is an important step in user retention and increased activity on the platform that could see long-term benefits for both creators and Twitter.”

A step in the right direction

Finally, Chase Petrey, chief operator, Pi by Paytm, a risk management provider, said: “With Twitter as a payments company, it will soon look like a Facebook marketplace with the advantage of making payments on the platform. It is not clear whether they only accept card payments or favor the use of PayPal. This is a step in the right direction that makes payments easier and brings marketplaces closer.”

Musk’s story

Ralph Dangelmaier, CEO of the payment platform BlueSnap, believe that Musk’s career history is the key motivator here.

He said: “Recent changes in Twitter’s operations — particularly the subscription move and comments about a currency system — signal something bigger is coming when it comes to payments. Right now, there are many theories as to why Elon is restructuring the company the way he is. Although some believe it may be politically motivated, I don’t think this is the case. Given his current high-profile ventures, many forget that he co-founded PayPal; payment technology is at the core of who he is as an entrepreneur.

“As he moved on to develop Tesla, we saw him experiment with the positioning and overall offerings in many ways. I think he will take a similar approach when it comes to new innovations with Twitter, including doubling payments. Even when the subscriptions drop, you get another guaranteed income stream if you play on payments.

“I don’t think Twitter will be the only major software platform exploring global embedded payments in the next year. There’s a lot of potential there, especially for companies that have had some difficult quarters. It may be turbulent for now, we have to wait and see before we draw any definitive conclusions.”