Elon Musk to build a Twitter payments system to compete with PayPal, report
When Elon Musk acquired Twitter last year for $44 billion, part of his vision back then was to turn Twitter into an “everything app.” It now appears that Musk is ready to turn that vision into a reality.
The Financial Times reported on Monday that Twitter is pushing forward its efforts to introduce payments across the social media platform. The report added that Esther Crawford, a high-ranking Twitter employee, “has started to map out the architecture needed to facilitate payments on the platform” alongside a small team of employees.
As part of Musk’s vision, the new payments system would use fiat currencies at first, but may further add crypto functionality later, The Financial Times reported, citing two people with familiarity with the company’s plans. The report also notes that Twitter has begun to apply for regulatory licenses to enter the US payments business, as well as crafting the infrastructure needed to support that.
In 1999 Musk sold Zip2 to the computer manufacturer Compaq for $307 million. He later used the proceeds to found an online financial services company, X.com, which later became PayPal, which was later acquired by the online auction eBay in 2002 for $1.5 billion.
Musk has said he wants Twitter to offer fintech services such as peer-to-peer transactions, savings accounts and debit cards, as part of a master plan to launch an “everything app” that incorporates messaging, payments and commerce. In 1999, Musk co-founded X.com, one of the first online banks, which later became part of payments giant PayPal.
In November, Twitter registered with the US Treasury as a payment processor. Now, the social giant is turning its attention to various state licenses it requires to finalize its plans.
On April 25, Twitter agreed to sell the company to Elon Musk for $44 billion. Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing the proposed transaction.
The purchase price represents a 38% premium to Twitter’s closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter. Musk needed to use his Tesla stock to raise $21 billion in equity to fund his takeover of the social media giant.