Twitter has been a social media platform staple since its launch in 2006, allowing users to share photos, opinions, and news in 140 characters or less. However, things have changed now that Twitter is offering its own payment service. Can Twitter really compete with established companies like PayPal and Apple Pay?
This blog post will explore the potential of social media-based payments versus their more-traditional counterparts. We’ll look into what sets them apart and the pros and cons for both sides of the equation when engaging in online purchases through these platforms.
According to a Financial Times report, Twitter is forging ahead with creating its own payments platform. Esther Crawford, the company’s Director of Product Management, has begun building the architecture for the new system and is said to be applying for applicable US licenses. This foray into payments could open up exciting new possibilities for Twitter and its users.
New Revenue Stream for Twitter
Since Elon Musk took control of Twitter, he has been working to increase the company’s income sources. Recently, they presented a subscription service called Twitter Blue that allows customers who pay to undo tweets, upload longer videos, customize their display, and more. In November last year, Musk also shared that Twitter planned to introduce a payment system.
New reports suggest Twitter’s plans for an in-app payments platform are close to being realized, as the social media giant has been applying for state licenses to launch their service in the US. In November, they registered as a payment processor with the US Treasury, initiating the process.
They are reportedly working on creating a secure vault to store user data. With these documents filed, only international regulatory approval is left; that should be done within one year after receiving the necessary US licenses. A source familiar with the matter estimates that once this is accomplished, Twitter can move forward.
Twitter Payments Platform To Compete With PayPal, Apple Pay
Last year, Elon Musk shared his plans to introduce a payments system on Twitter. This would include monetized videos created by users and the option to send money to friends quickly and securely. Furthermore, stored cash balances can be transferred into an authenticated bank account.
Paid verification is also expected to be part of this platform, allowing for easier identification of creators and customers within the app. The addition of this payment system will help support a more established creator ecosystem on Twitter.
Elon Musk has suggested that he may establish banking accounts with actual interest rates utilizing Twitter’s payments system. This could provide competition for Apple’s Savings Account, which is anticipated to offer great returns on high-yield accounts.
It could also rival services like PayPal, Apple Pay, and Venmo, which have already gained popularity and trust among users. PayPal, for example, boasts over 400 million active users worldwide, making it one of the largest payment platforms in the world.
Its user-friendly interface has made it a go-to platform for various uses, including online shopping, in-store payments, and even online gambling on popular PayPal casinos. In comparison, Twitter’s user base, as of the second quarter of 2021, was approximately 206 million monetizable daily active users, indicating a significant gap between the two companies.
While it is premature to say if all of Musk’s proposals will make it onto the Twitter payments platform, they present an exciting possibility.
What has Musk said so far about Twitter and payments?
At Musk’s inaugural meeting with Twitter personnel, he expressed his aspirations to make Twitter a spot for financial transactions. It is a “top priority”! What’s more essential: making Twitter a viable payment platform is paramount to him.
“I think there’s this transformative opportunity in payments. And payments really are just the exchange of information. From an information standpoint, not a huge difference between, say, just sending a direct message and sending a payment.
They are the same thing. In principle, you can use a direct messaging stack for payments. And so that’s definitely a direction we’re going to go in, enabling people on Twitter to send money anywhere in the world instantly and in real-time.”
Musk acknowledged the potential for fraud and theft when handling credit card information in his speech. To acquire more users, he proposed providing a monetary incentive for anyone who signs up – about $10 – that can be used to transact on their platform. Twitter will need money transfer licenses for this plan, which they have applied for.
With the payments system in place, Musk dreams of creating high-yield money market accounts and other payment solutions, such as debit cards and checks to increase e-commerce activity within the site. Ultimately, this would make Twitter much more user-friendly than it is now.