A new chapter for Twitter has started now that Elon Musk has taken the wheels of the social media company. Just yesterday, he revealed what would be its latest idea to further monetize the platform – a payments system.
In a live-streamed Twitter Spaces that sought to inform advertisers about what’s coming for the firm, the founder of SpaceX revealed that money transfers within Twitter could be the next feature to be launched.
Musk’s idea is to first create content formats that creators can easily monetize such as paywalled videos. Users could reportedly pay for accessing this content and the money will be transferred to the creator and this would create an account balance within its Twitter account.
In addition, users should eventually be able to transfer money from a bank account to Twitter to either pay for the content or make transfers to other users. To further entice the public to add money to their Twitter account, Musk would be looking into offering high-yield savings accounts as many financial technology companies do these days.
A report from the New York Times confirmed that Twitter is seeking authorization from the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to be able to store money from users and facilitate transfers.
Will Twitter Become a “Super App” Under Musk’s Leadership?
Musk’s rationale could be perhaps aiming to create what is known as a “super app”, which is a go-to mobile application that features a wide range of services that people use for their everyday needs such as buying groceries, taking out a loan, or send money to a relative.
Advertisers have been worried about the direction that Twitter will take now that the head of Tesla (TSLA) has acquired the firm and that has prompted Musk to appeal to them in an effort to keep revenues from falling off a cliff.
A recent report indicated that Twitter’s sales team received a handful of answers about the company’s future that sought to appease these concerns. In the materials, Twitter stated that its user base has been growing rapidly since Musk took over.
Monetization Remains the Top Priority for Musk
A top priority for Musk at the moment is to look for ways to rapidly monetize the company’s large 200 million+ user base as the new boss took a significant amount of debt to finance the acquisition – reportedly more than $6 billion.
Twitter will no longer have to disclose its financial performance to the public but the company was already struggling to deliver positive results to shareholders as indicated by its financial results covering the second quarter of 2022. During this period, the firm produced a net loss of $270 million and saw its operating cash flows drop from $772.15 million it produced in Q2 2021 to $155.79 million.
As its first order of business, Musk opted to revamp Twitter’s subscription program called Twitter Blue and initially ordered that verified users must sign up to maintain their elite status within the platform.
The measure encountered strong opposition from a large number of influencers and creators who argued that they should not have to pay just because of their prominence. In addition, there were security-related concerns. In this regard, public figures who opt not to sign up for Blue and lose their blue ribbons may be targeted by impersonators to commit fraud.
Twitter is expected to roll out the new Twitter Blue subscription once the US midterm elections come to an end. Known for making bold claims, Musk could still be working on what would be the actual roadmap for Twitter for the next one to five years. However, he needs to keep advertisers happy from now to avoid some financial catastrophes in the near term.
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