Elon Musk rushes to debut X payments as tech issues hamper creator payouts

Elon Musk is still frantically pushing to launch X payment services in the US by the end of 2024, Bloomberg reported Tuesday.

Launching payment services is arguably one of the reasons why Musk paid so much to acquire Twitter in 2022. His rebranding of the social platform into X revives a former dream he had as a PayPal co-founder who fought and failed to name the now-ubiquitous payments app X. Musk has told X staff that transforming the company into a payments provider would be critical to achieving his goal of turning X into a so-called everything app "within three to five years."

Late last year, Musk said it would "blow" his "mind" if X didn't roll out payments by the end of 2024, so Bloomberg's report likely comes as no big surprise to Musk's biggest fans who believe in his vision. At that time, Musk said he wanted X users' "entire financial lives" on the platform before 2024 ended, and a Bloomberg review of "more than 350 pages of documents and emails related to money transmitter licenses that X Payments submitted in 11 states" shows approximately how close he is to making that dream a reality on his platform.

X Payments, a subsidiary of X, reports that X already has money transmitter licenses in 28 states, but X wants to secure licenses in all states before 2024 winds down, Bloomberg reported.

Bloomberg's review found that X has a multiyear plan to gradually introduce payment features across the US—including "Venmo-like" features to send and receive money, as well as make purchases online—but hopes to begin that process this year. Payment providers like Stripe and Adyen have already partnered with X to process its transactions, Bloomberg reported, and X has told regulators that it "anticipated" that its payments system would also rely on those partnerships.

Musk initially had hoped to launch payments globally in 2024, but regulatory pressures forced him to tamp down those ambitions, Bloomberg reported. States like Massachusetts, for example, required X to resubmit its application only after more than half of US states had issued licenses, Bloomberg found.

Ultimately, Musk wants X to become the largest financial institution in the world. Bloomberg reported that he plans to do this by giving users a convenient "digital dashboard" through X "that will serve as a centralized hub for all payments activity" online. To make sure that users keep their money stashed on the platform, Musk plans to offer "extremely high yield" savings accounts that X Payments' chief information security officer, Chris Stanley, teased in April would basically guarantee that funds are rarely withdrawn from X.

“The end goal is if you ever have any incentive to take money out of our system, then we have failed,” Stanley posted on X.

Stanley compared X payments to Venmo and Apple Pay and said X's plan for its payment feature was to "evolve" so that X users "can gain interest, buy products," and "eventually use it to buy things in stores."

Bloomberg confirmed that X does not plan to charge users any fees to send or receive payments, although Musk has told regulators that offering payments will "boost" X's business by increasing X users' "participation and engagement." Analysts told Bloomberg that X could also profit off payments by charging merchants fees or by "offering banking services, such as checking accounts and debit cards."

Musk has told X staff that he plans to offer checking accounts, debit cards, and even loans through X, saying that "if you address all things that you want from a finance standpoint, then we will be the people’s financial institution."

X CEO Linda Yaccarino has been among the biggest cheerleaders for Musk's plan to turn X into a bank, writing in a blog last year, "We want money on X to flow as freely as information and conversation."

X creators’ monetization woes

As The Verge thoroughly documented, Musk first divulged his plan to launch X payments in a staff meeting in 2022, where he described an incentive scheme to keep users on the platform by populating a cash balance of perhaps $10 for every verified user.

It's unclear if he still plans to go this route, but in the same meeting, Musk emphasized that a key tactic to get more money moving on the platform was to allow creators to monetize their X posts. X would benefit in two ways, Musk said, likely raising ad revenue by keeping influential creators posting and by enticing new subscribers through their more frequent posts.

That's why Musk told staff that it was a "high priority" to start compensating creators. That finally started happening in July 2023, with some creators "pleasantly surprised" by X's ad revenue sharing payouts, Mashable reported. But not every creator was convinced that X was the priority destination for their content, The Wall Street Journal reported in March, with many creators consistently finding more lucrative paydays on platforms like YouTube, TikTok, and Instagram.

Meanwhile, The Journal noted that third-party data showed that X users were declining, while NBC News reported that pro-Nazi accounts still flourishing on X in April were keeping some advertisers away from the platform. In 2023, X's revenue, according to Bloomberg, remained down in the aftermath of an advertiser boycott, losing $456 million in the first quarter alone and total revenue decreasing by 40 percent in the first six months compared to the same period in the prior year.

For Musk, moving into payments represents an opportunity to decrease X's reliance on advertising revenue that since his takeover has not been reliable due to what some advertisers view as lax content moderation on the platform. To entice advertisers back, X recently began offering advertisers more control over what content their ads appear next to, including a "pre-screened, brand suitable" inventory of vertical videos along which they can ostensibly feel safer running ads.

Creating a safe haven for advertisers in videos could help X turn its finances around while increasing the revenue pool for more creators. Last month, Yaccarino told conference attendees that X has become "a video-first platform" while noting that "part of what is driving that success is inviting creators onto our platform."

Seemingly, X is hoping that prioritizing video content that brands consider safe will increase ad revenue enough to keep creators on the platform and attract new creators for big payouts. But it continues to be a bumpy ride for creators on X, who hit a new roadblock after X recently started requiring ID verification to receive payouts.

Just a week ago, the X Creators account posted to confirm that X was "aware of the issues with ID verification our creators are experiencing." The account said that X "urgently implemented" fixes over the weekend that were keeping creators from cashing in on X payments.

Apparently, X launched the ID verification with a camera issue that affected the processing of the back of creators' IDs. Then, X failed to clearly communicate the issue to creators or even clearly inform them of where they were in the process of being verified. Instead, creators would experience timeouts when attempting to verify their identities and had no idea if X had received or was processing their submissions.

X told creators to respond to the post if they were still experiencing issues, promising "clearer messaging on your current step in the process" in the future, as well as additional updates "throughout the week" that were seemingly never posted publicly.

"We have more to do," X promised.

As of March, X Creators reported that "X has paid out an impressive sum of more than $45 million to more than 150,000 creators." But on the thread regarding the ID verification issues, users complained that the ID verification "always fails," with some claiming that they've waited as long as a year without getting approved to receive payouts.

Others confirmed that their applications now say "pending review," which could be a sign that X is getting increasingly serious about retaining creators on the platform as it inches closer to achieving Musk's everything app dream.