Banking on X: How will Elon Musk’s Pay-by-Bank gambit benefit users?

Pay-by-bank, a trend thriving globally, might find its breakthrough in the US, courtesy of Elon Musk’s strategic moves with X, the social media platform formerly known as Twitter.

While the pay-by-bank channel is anticipated to surge in 2024, Musk’s disruptive ambitions for X could play a pivotal role in bringing this trend to American shores.

Elon Musk’s latest venture involves turning X into a banking and payments super app, with a focus on the pay-by-bank initiative. The “Not a Bot” project, introduced in the Philippines and New Zealand, seems to be more than just an effort to combat bots and spammers on the platform. Payments consultant Richard Crone emphasises the hidden potential, stating, “They aren’t charging the dollar to generate revenue. They want to preauthenticate and validate the user.”

The $1 fee, seemingly trivial, serves a more profound purpose. By gathering user verification and bank payment account information, X enhances user value for advertisers and itself, setting the stage for social commerce within the app. This move positions X as a potential financial super app, paving the way for services like pay-by-bank.

Crone highlights the strategic choice of the Philippines as a test market due to its significance in international remittances, making it an ideal ground for X to challenge existing payment providers. 

The goal is not just subscription payments but to establish a foundation for pay-by-bank, potentially reshaping the financial services landscape.

In Crone’s perspective, this seemingly innocuous move could have far-reaching consequences, envisioning a future where banks and credit unions leverage X’s platform for marketing, starting with pay-by-bank as the catalyst for broader financial innovation.