Elon Musk vs Paypal? Twitter files paperwork to enter payments business

Twitter founder Elon Musk. Photos / AP, Getty Images

Elon Musk’s Twitter may be getting into the payments business.

The social media company last week filed registration paperwork to pave the way for it to process payments, according to a filing with the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, which was obtained by The New York Times. The move comes as Musk seeks to transform Twitter after purchasing the company last month for US$44 billion.

Musk has moved rapidly to overhaul the social media service, laying off half its work force last week and adding subscription features to boost revenue. A self described “free speech absolutist,” the billionaire has also said he would roll back many of Twitter’s content rules, though he has changed nothing yet and plans to form a council to help make those decisions.

Businesses that conduct money transfers, exchange currency or cash checks are required to register with FinCEN, and to report suspicious transactions to the agency. A FinCEN spokeswoman said the agency does not comment on specific businesses. Twitter did not immediately respond to a request for comment.

Turning Twitter into a payments processor would be a return of sorts for Musk to his early days in the tech industry. In 1999, he helped found X.com an online bank that later became the digital payments company PayPal. Musk, 51, has often mused about incorporating payments into Twitter, saying he planned to transform the social media service into an “everything app.”

The everything app would be modeled after WeChat, a Chinese social media platform that includes instant messaging and mobile payments, Musk has said. In China, WeChat, which is owned by Tencent, is used by more than a billion people to find news, hail cabs and order food.

Before Musk took the reins at Twitter, the company had dabbled in financial services. Last September, it added a tipping feature that allows users to make small donations to their favorite Twitter creators, using cash or cryptocurrency. It has also let people charge subscription fees for exclusive content, like newsletters, taking a small cut of their earnings.

But Twitter lacks sophisticated payments systems, which could generate revenue for the company if Musk can build them and convince people to use them. The billionaire faces pressure to deliver immediate results at Twitter because he took out $13 billion in loans to finance the deal, which will require the company to pay more than $1 billion in interest annually.

To drum up revenue, Musk and his advisers have discussed allowing users to pay a fee in order to send a direct message to celebrities on the platform; adding “paywalled” videos; and charging users US$8 per month to receive a coveted verification check mark on their profiles.

Written by: Kate Conger

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