Musk's Twitter Payment Vision in Tune with Fiat-Crypto Gateway Alchemy Pay
Elon Musk, the owner of the social media company Twitter, is looking for new ways to increase revenue sources other than the original USD 5 billion a year from the advertising business model. Musk seems to be focused on the payments business for revenue growth.
Twitter's Revenue Growth Based on Payments Business
The Financial Times has recently
reported that Musk is focused on the payments business for revenue growth. Musk
wants Twitter to become a "universal app" that combines information,
payments, and commerce. Twitter intends to provide fintech services such as
peer-to-peer transactions, savings accounts, and debit cards. Twitter had
previously been testing the payment business to reward creators.
The social media company registered as
a payment processor with the US Treasury Department in November 2022 and
started applying in various states to obtain the licenses required for the
payment business, which is expected to be completed within a year to meet the
regulatory and compliance needs of Twitter payments.
The system will first support payments
in fiat currency and will be extended later to cryptocurrency payments. With
Twitter being the mainstay for the Web3 project’s social media presence and
Musk being a long-time holder of Dogecoin, there is speculation that Musk
intends to lead Twitter into the crypto payments business to fulfill the grand
vision.
Crypto Payments Providers Faced with Competition
Twitter's entry into the crypto
payments segment is not without reason. While cryptocurrencies are already widely
recognized and used, crypto payments are at a relatively early stage, whereas
traditional mobile payments are well-developed. PayPal is currently the world’s
largest online payment provider with over 400 million active users worldwide,
while MoonPay, the leading payment provider positioned as "PayPal for
Crypto," has only 7 million verified users. Twitter, with its large user
base and Web3 technology, has a lot to offer.
Cointelegraph Research released a
report in 2022 that provides a detailed analysis of traditional businesses and
their access to crypto payments. The report reveals several well-known
companies from various industries that have supported using cryptocurrencies to
receive payments, including Subway, PlayStation, AT&T, Home Depot, Whole Foods,
and others. Countries such as El Salvador and the Central African Republic have
adopted bitcoin as legal tender, and Panama and Paraguay are likely to join
them in the coming years. With the further integration of cryptocurrencies with
traditional finance, the acceptance of cryptocurrencies and digital assets as a
method of payment is likely to become an inevitable trend.
Besides the broader prospect of crypto
payments due to the higher acceptance of digital assets by enterprises and
businesses, crypto payments also have an edge over traditional payments. The
cross-border clearing and settlement efficiency of crypto payments is faster
and cheaper than the traditional remittance method. In Latin American countries
with severe currency devaluation, the decentralized crypto financial system is
more stable than the local fiat currency system, which has created a huge
demand for crypto payments.
Currently, players in crypto payment
can be divided into three categories: traditional payment giants, centralized
exchanges, and crypto payment service providers. Traditional mobile payment services
providers such as Stripe and Apple Pay are more mature in technology and can
cooperate with exchanges or third-party service providers to provide or adopt
APIs for deposit and withdrawal. Exchanges such as Binance and Coinbase
cooperate with centralized card organizations such as Visa and MasterCard to
issue co-branded credit cards and support users' use of credit cards for
spending. Web3 native crypto payment providers include MoonPay, BitPay,
RampPay, Alchemy Pay, Transak, and others, each with its own set of underlying
protocols and positioning.
Although the crypto payment market is
still in its early stages and far from forming monopolies, many players have
already entered the segment. With the entry of Twitter and fiat currencies
gradually flowing into the cryptocurrency market, players in the payment
business segment are likely to face more competition.
What is your take on Twitter’s payment
vision with Alchemy Pay? Please post your comments.
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