Elon Musk’s social media platform X, formerly known as Twitter, has introduced a new financial service called X Money. This platform allows users to transfer money to each other, although it is not an actual bank. Instead, X Money leverages the technology and banking services of Cross River Bank, branding this backbone as X Money.
Using established banks’ infrastructure is common for new financial ventures due to the time-consuming and costly nature of chartering a new bank. Currently, X Money operates on an invite-only basis. Users who join will receive a Visa debit card branded with an ‘X’ and usable at any ATM. Transactions between X users occur in real-time.
At present, only X’s paying members are eligible for invitations. As part of its strategy to attract users, X Money offers a 6% yield on deposits and 3% cashback on eligible purchases. To qualify for the 6% yield, customers need a minimum deposit of $1,000. Additionally, customers must enroll in X’s premium services, which cost at least $8 monthly, requiring a deposit of $1,600 to cover these costs.
Musk has expressed a vision for X as an ‘everything app’, encompassing various financial services. His background in financial services includes the creation of one of the first online banks, X.com, which eventually merged into what is now PayPal.
With X Money, the company is entering a competitive space dominated by services like PayPal’s Venmo, Zelle, and Cash App. It remains to be seen how X Money will stand out in this crowded market.
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