Payments are the reason Elon Musk bought Twitter
Elon Musk took over as CEO of Twitter last week, and the media world – which spends most of its day on the social media platform – is obsessed with his motives. Did he buy Twitter to advance a hard-right political agenda? Why has he carry a sink at Twitter headquarters? Does he plan to take over the world? The answer is more ho-hum – it’s all about payments.
Musk, of course, is part of the PayPal Mafia, a gang that built the giant payment platform in the late 90s and became a billionaire. Payouts are in Musk’s blood. One of his first ventures was a payment company called X, a name he resurrected for a mysterious twitter product it claimed will reach 104 million users by 2028.
Caitlin Long, a respected alumna Morgan Stanley banker who now runs a stablecoin companytold me she has no doubt that Musk is using Twitter as a way to pursue his long-held desire to remake the payment industry.
“He’s been trying to disintermediate ACH his whole career,” she said, referring to the bank-run money transfer network. Long sees Musk’s Twitter game as the reincarnation of Libra, which sought to provide crypto wallets to Facebook’s more than one billion users. The plan has sunk under congressional scrutiny, but Long says Twitter can succeed where Facebook failed because its payment backbone is the Bitcoin Lightning Network, an essentially decentralized structure that doesn’t have the same political baggage as a project led by Mark Zuckerberg.
If you want more proof that Musk’s purchase on Twitter is a payment game, look at some of the people he’s brought in to help him: Binance founder Changpeng Zhao, fellow PayPal mafia which is deeply involved in crypto, as well as Sriram Krishnan, who invests for a16z crypto and has an Ethereum address in his Twitter account. Does this sound like the stuff of a political and media operation or a payment operation?
Another good reason to think Musk will treat his new purchase as payment is that he said so. According to an investor document obtained by the New York TimesMusk predicted Twitter will bring $1.2 billion in payment revenue by 2028, which would also achieve its stated goal of making the platform less reliant on advertisers.
When Musk ran PayPal in 1999, the company was in a position to disrupt the payments industry due to a new technology – the Internet – and the contrarian attitude of its management team. Fast forward to acquiring Twitter, and it’s clear he wants to do the same thing again.
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