The move is a critical part of Musk’s plan to launch a one-stop-shop “everything app” that incorporates messaging, payments, and commerce. Esther Crawford, a top executive within Twitter, has been appointed as the CEO of Twitter Payments LLC. She has started to lead a small team in mapping out the architecture necessary to facilitate payments on the platform.
Twitter Applies for US State Licences
Twitter has started the process of obtaining the necessary regulatory licenses across the US. In November of last year, the company registered with the US Treasury as a payments processor. It has now begun applying for some of the state licenses it needs to launch the service. The company hopes to have all the necessary licenses in place within a year, after which it plans to expand internationally.
The move into payments is not without its challenges, including significant compliance burdens and winning consumer trust. Elon Musk recently approached Twitter’s equity investors in an attempt to raise more capital. The popular CEO indicated that some of the money would be used to fund a “hiring spree” of programmers. The goal is to build a “super app” capable of processing payments.
However, the introduction of payments on Twitter is likely to be a costly endeavor. Indeed, the company will face stiff competition from established players such as Venmo, Cash App, and Zelle in the US. Additionally, the social media giant will face high levels of regulatory scrutiny. This has been heightened after Musk recently cut more than half of Twitter’s employees, raising concerns about its compliance staffing.
Twitter has been a platform on which payments already occur, as hundreds of thousands of users share links to third-party payment options on their accounts and tweets. However, for Twitter to succeed as a payment platform, it will need to offer a compelling proposition that can rival the established players and overcome the regulatory hurdles that come with the territory.
₿𝗥𝗘𝗔𝗞𝗜𝗡𝗚: Twitter has officially started the regulatory process to add payment features in the United States! @Elonmusk recently explained, “There’s a role for crypto in the future. It’s a no-brainer for Twitter to have payments in both fiat and crypto” pic.twitter.com/f71EZFa1LP— Documenting ₿itcoin 📄 (@DocumentingBTC) January 30, 2023
In an early pitch deck to investors, seen by the Financial Times, Elon Musk stated that he aimed for Twitter to bring in about $1.3 billion in payment revenue by 2028. The vision for the platform goes far beyond simple tipping and ecommerce, and includes ways for users to directly reward creators, buy items directly through the platform, and pay one another. Musk has stated that the system will be fiat-first but built in a way that could potentially accommodate crypto functionality in the future.
Dogecoin (DOGE) Price Jumps
The news of Twitter’s plans to integrate payments on its platform has caused a buzz in the financial world, leading to a 7% surge in the price of Dogecoin within minutes.
As the social media giant takes steps to introduce payments, it has caused speculation among investors and cryptocurrency enthusiasts. The appointment of Esther Crawford as CEO of Twitter Payments LLC, and the start of the process of obtaining necessary regulatory licenses across the US, has further fueled the excitement.
Dogecoin, a meme-inspired cryptocurrency, has been on the rise in recent months, with the increase in price following the news of Twitter’s plans only adding to the momentum. While the move into payments is not without its challenges, the potential for Twitter to offer a compelling payment platform has many excited.