Elon Musk and Twitter Pay: What If Twitter Integrates a Payment System?

2022 was a year filled with major events, particularly in the realm of startup acquisitions (M&A). Among them, Elon Musk’s acquisition of Twitter stands out as one of the most significant cases. On April 14, 2022, Musk initially proposed buying Twitter for $43 billion. By October 27, he finalized the deal at $44 billion (approximately 63 trillion KRW).

As one of Twitter’s most influential figures, boasting over 100 million followers, Musk’s acquisition naturally drew massive public attention. His history of serial entrepreneurship and vast fortune made him a captivating figure. His eccentric personality and frequent unconventional actions only amplified the curiosity surrounding the acquisition. Despite numerous controversies and ongoing debates, the acquisition is now complete.

Why Did Elon Musk Acquire Twitter?

To secure funds for the purchase, Musk sought investment from various financial powerhouses, including Saudi Arabia’s Public Investment Fund (PIF), leading Silicon Valley venture capital firm Sequoia Capital, Andreessen Horowitz (a16z), and Binance, the world’s largest cryptocurrency exchange. Reports suggest that Musk personally pitched his vision to these investors, though the exact details of his proposal remain undisclosed.

However, based on Musk’s statements and expert analyses, his motivations can be broadly summarized in two key points:

1. A Vision for Free Speech and Decentralized Media
   Musk has often criticized mainstream media for bias and polarization. He envisions Twitter as a decentralized media platform where users freely share information and shape narratives from the ground up, fostering a more open discourse.

2. A Move Toward an Integrated Payment System
   Analysts speculate that Musk aims to leverage Twitter’s massive user base to integrate a payment system, potentially linking it to his broader vision of sustainable energy and blockchain applications.

Twitter’s Payment System: Musk’s New Business Model?

Recent reports suggest that Musk is actively working on implementing an online payment system within Twitter. The company has applied for regulatory approval in the U.S. and hopes to secure the necessary licenses by the end of 2023.

This initiative aligns with Musk’s extensive experience in financial technology. In 1999, he co-founded X.com, an online banking startup that later evolved into PayPal, revolutionizing global e-commerce and digital payments. Given Twitter’s struggles with declining ad revenue, Musk may see fintech as a viable alternative revenue stream.

With 450 million active users, Twitter remains a dominant social media platform, serving as a hub for real-time news, opinions, and business announcements—including Musk’s updates on Tesla, SpaceX, and his other ventures. If Twitter successfully integrates a payment system, it could unlock new business opportunities, including:

• E-commerce Integration: Enabling direct transactions within tweets
• Peer-to-Peer Payments: Facilitating financial exchanges between users
• Subscription & Tip-Based Monetization: Enhancing revenue for creators and the platform

In August 2022, Twitter established a subsidiary, Twitter Payments LLC, appointing Esther Crawford as its CEO. According to internal documents, Musk aims to generate $1.3 billion in payment-related revenue by 2028—an ambitious goal, given that Twitter’s current revenue from creator tipping and subscriptions is estimated at just $15 million per year. Achieving an 80-fold increase in five years will be a formidable challenge.

Regulatory Hurdles and Apple’s Opposition

Fintech is a heavily regulated industry, particularly in the U.S., where even tech giants have struggled to establish financial services. Moreover, Musk’s erratic decision-making—such as his impulsive changes to Twitter’s verification system—has raised concerns about his ability to navigate regulatory hurdles effectively.

Another potential roadblock is Apple. In December 2022, Musk publicly clashed with Apple CEO Tim Cook over Twitter’s ad revenue and the possibility of Apple removing Twitter from the App Store. While Musk later claimed to have resolved the issue after a meeting at Apple’s headquarters, some speculate that the real conflict stemmed from Twitter’s payment system.

Apple mandates that all in-app purchases go through its App Store payment system, subjecting them to a 30% commission fee. If Musk intends to bypass Apple’s infrastructure—particularly by integrating cryptocurrency payments—this could lead to further conflicts.

A Future with Crypto Payments?

Musk has a well-documented history of promoting cryptocurrencies, famously dubbing himself the “Dogefather” in support of Dogecoin. Many observers believe that Twitter’s future payment system could eventually incorporate crypto transactions, challenging Apple’s fiat-based payment model.

In the past, Tesla briefly accepted Bitcoin as a payment method for car purchases, only to retract the option due to environmental concerns. If Musk integrates cryptocurrency payments into Twitter, it could revolutionize digital transactions within social media.

What Lies Ahead for Twitter and Musk?

Four months into his Twitter ownership, Musk is facing mounting challenges—including declining ad revenue and the need for drastic cost-cutting measures. His leadership style has drawn criticism, particularly regarding mass layoffs and extreme work demands on employees.

However, if Twitter successfully implements a payment system, it could redefine the future of social media business models. Given Musk’s track record of disruptive innovation, many are watching closely to see if he can once again turn an ambitious vision into reality.

Will Musk’s bold plans lead Twitter into a new era of social media-driven fintech? The world is waiting to find out.