Two years ago, I coined the word “fintechnolization” – a construct that every digital platform must have a mature state of offering a fintech solution. I had watched all great digital platforms on how they ended up providing one fintech solution or another, even when they began in an unrelated sector.
Today, we are learning that Twitter has filed paperwork to become a payment company: “The social media firm has filed paperwork with the Treasury Department that would allow it to process payments”. This is the natural progression for Twitter because it is a digital platform.
Two weeks into his tenure as Twitter CEO, Elon Musk appears to have taken a step toward transforming the platform into an “everything” app. The social media firm has filed paperwork with the Treasury Department that would allow it to process payments, The New York Times reported Wednesday. Musk has long mused about remaking Twitter into an all-purpose app modeled on China’s WeChat — a platform that “includes instant messaging and mobile payments” and “is used by more than a billion people to find news, hail cabs and order food.” (LinkedIn News)
Like the village square, people come together to connect and share. Most times, the operating system is payment since value will be exchanged. There is nothing that makes a digital platform better than fintech because fintech delivers higher valuation multiples. If that enters into the DNA of Twitter, the $44 billion Musk paid may look very cheap in three years. Indeed, some activists will begin to say “why did the government allow him to buy it that cheap?”
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But as Twitter goes through fintechnolization, watch what happens in Stripe and PayPal because if Twitter evolves to become like WeChat (the everyday super-app in China) a massive disintermediation may happen. To be the richest man in the world does not happen because of a UN resolution. It happens because you can do many things right and get them to compound. We’re living in the era of Elon of Africa.
Elon Musk detailed his vision for Twitter’s plan to enter the payments market during a livestreamed meeting with Twitter advertisers, hosted on Twitter Spaces on Wednesday. The new Twitter owner suggested that, in the future, users would be able to send money to others on the platform, extract their funds to authenticated bank accounts and, later, perhaps, be offered a high-yield money market account to encourage them to move their cash to Twitter.
The new remarks followed a report this morning by The New York Times which confirmed Twitter last week had filed registration paperwork that would allow it to process payments. The report cited Twitter’s filing with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), noting that a business would need to register before it could conduct money transfers, exchange currency or cash checks.
In today’s meeting, Musk explained how paid verification, which Twitter is rolling out now with its revamped Twitter Blue subscription, as well as support for a creator ecosystem, could pave the way for a payments system on its platform.
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