X is seeking to build the "everything app". This is something that we started to discuss a couple of years ago when Elon Musk purchased Twitter.
One of the key factors in the endeavor was the addition of payments. As of this moment, X has acquired money transmitter licenses in 49 states. This means they are good to operate within the US.
An announcement by CEO Linda Yaccarino updated everyone to the state of the roll out and the first partnership agreement.
In this article we will discuss what is taking place while also comparing it to the potential of Web 3.0.
X Money Going Live: Will X Add Crypto?
The cryptocurrency community is most interested in whether or not X will add crypto payments to the platform. Once again, we have the insaniy.
Let us start with the DOGE people. Many are aware that Musk often tweets about this crypto-asset. A lot buy into all that he states about it while others, myself included, thinks he is primarily trolling the community.
Either way, this exemplfies the mindset. Instead of focusing upon the building out of payment rails for DOGE, the hope is a Web 2.0 system integrates it. Here we likely see a large reason why Web 3.0 is mostly stalled.
The lesson from Wall Street and Bitcoin should be learned. For years, people were screaming for Wall Street to get involved with crypto. That is exactly what happened. Unfortunately, instead of expanding the tenets espoused by Satoshi, we see a complete hijacking of BTC.
X Money And Visa
X is partnering with Visa. This is going to be the first of, presumably, many arrangements which will fuel financial services on X.
With Visa as its first financial partner, X aims to seamlessly integrate instant transactions into its ecosystem, a shift that could challenge traditional banking and fintech players.
The service will facilitate secure and instant funding through Visa Direct, enable peer-to-peer payments via linked debit cards, and support direct fund transfers to bank accounts.
The first thing that jumps out to me is more of the same. Here we have a financial intermediary inserted at the center of all activity. This is going through Visa, with them taking a cut of each transaction.
Of course, we cannot overlook the fact that X is also take a sliver. They are not doing this for free. Hence, we have an immediate doubling up of rent seekers.
WeChat Clone
The mental framework X is working from is WeChat. This is often cited as the standard that is targeted.
Payments and money transfer is crucial. It also emphasizes the shift away from social media as the primary focus. We have discussed the idea how this evolved simply into a path for data generation.
Of course, with payments, simply consider the information that X will be able to garner. The data generated will feed into greater personalization. People will complain about this, while feeding the platform more data.
Payments is a huge business. If we look at PayPal, the most common online payment processor in the West, it carries a market capitalization of $90 billion. Compare that to the $44 billion that Musk and his investors paid for Twitter. X has around 600 million potential payment users.
Web 3.0 Platforms
Web 3.0 needs to learn this lesson.
The key is to have a platform. Twitter was simply a social media application, focusing upon microblogging. Since the Musk purchase, it is focusing upon becoming a media platform, with video and other services available.
Naturally, this was not lost on other companies, especially Meta. It has added new services such as microblogging. Payments is an addition that feeds into the platform idea.
Central to this is providing as many services for users as possible. We are already seeing the start of this with AI. Those services are going to be paramount in the near term. Those that are operating in isolation will fall behind.
Speaking of AI, here is where X could run into issues. By parterning with Visa, the ability for AI agents to operate is negated to a degree. My prediction is we are going to see a time when most transactions are micropayments. This is impossible with an entity like Visa.
As AI agents take over, the volume of financial payments will explode, at least in number. Total value growth will likely lag due to the fact that we will see smaller payments. Many will be in fractions of a penny.
How does Visa cope with that? It cannot. Fortunately, Web 3.0 can handle this easily.
One of the advantages to blockchain is the ability to operate directly. The peer-to-peer system, unlike Visa, is not run by some company. Instead, network providers are incentivized from the blockchain. Network fees do becoming the primarly focus at this point in the discussion, something that will have to be addressed. Fortunately, blockchains such as Hive operate without any direct transaction fees.
Blockchains are networks, not platforms. They provide underlying financial transactions. This is big. While X is working on adding it, with blockchain, it is native. In other words, it is the starting point for any Web 3.0 platform.
It is why Web 3.0 can minimize the number of financial intermediaries. They simply are not needed.
Will X add crypto? It is something many are hoping for.