Musk’s X receives Pennsylvania money license in push toward payment features

Elon Musk’s social media platform X, formerly known as Twitter, took a step closer to offering payment features after receiving a money-transmitter license from a 13th U.S. state this week.

The approval by Pennsylvania, which occurred on Monday according to a public licensing database, has not been previously reported. It grants X the ability to facilitate money transfers and paves the way for the company to allow users to send money to one another, similar to PayPal’s Venmo.

Since acquiring Twitter in October 2022, Musk has said he envisions remodeling the company into the purveyor of an “everything app” similar to popular Chinese app WeChat, which lets users send messages but also hail a taxi or pay merchants.

Musk told X employees that users should be able to conduct their “entire financial life” on the platform and that he expected new features would be “rolled out by the end of next year,” according to an October report from The Verge.

In order to offer payment services to users across the U.S., X will need approval in every state, a process that could take up to 18 months and cost several million dollars, said Aaron Klein, a senior fellow focused on financial technology and regulation at the Brookings Institution.

Other states that have approved X for money-transmitter licenses include Arizona, Georgia, Wyoming and Maryland.

The push into payments could help X diversify its business beyond digital advertising, which has suffered setbacks since Musk bought the former Twitter. Some major advertisers paused their spending or fled the platform after Musk last month agreed with an X user who espoused an antisemitic conspiracy theory. Speaking at a New York Times DealBook event later that month, the billionaire CEO made a profane comment about brands that had suspended their ads on X.

Musk’s history of controversial statements and his unpredictable decision-making at X mean that gaining the trust of users and financial regulators will be “the single biggest issue” for X’s push into payments, said Sabrina Howell, associate professor of finance at New York University Stern School of Business.

“The financial industry does a tremendous amount of dotting I’s and crossing T’s. This doesn’t strike me as very compatible with the way Musk runs his businesses,” she said.

X declined to comment.

A U.S. state official, who declined to be named, said their state is in the process of reviewing X’s money transmitter license application. Ongoing headlines about Musk and X are being considered as the state reviews the application, the official said.

“X has been struggling since Musk took over … it’s hard to see a networking app, that in some degree is shrinking, successfully pivoting into new fields,” said the Brookings Institution’s Klein.

The company received its first state money-transmitter license in New Hampshire in June, but Twitter began the work to submit applications for some states before Musk’s acquisition, according to two former employees, who declined to be named to discuss confidential work.

The initial strategy of the then Twitter was to apply for licenses in states that had relatively easy requirements. It would then pursue approval in states like New York and California that were expected to have stricter review processes, one of the former employees said.

During a live-audio session on the platform last year, Musk said he also wanted the company eventually to offer a debit card and money-market accounts.

Holding users’ money will require X to have a bank charter, another regulatory hurdle, or a partnership with an existing bank, NYU Stern’s Howell said.