Elon Musk’s social media company X, formerly known as Twitter, launched its own bank account-like product where users can send money to one another.
The service, known as X Money, is not a new bank. X Money is using technology and banking services provided by Cross River Bank and branding that backbone as X Money. It is common for new financial companies to use a traditional bank’s backbone to launch their services, as chartering a new bank is a timely and costly process.
Currently X Money is invite only and users will receive an “X”-branded Visa debit card that is usable at any ATM. Users of X will be able to send money to other X users in real-time, the company said. Invitations are only available to X’s paying members presently.
To attract customers, X Money is offering a 6 per cent yield on deposits and 3 per cent cashback on eligible purchases.
To earn the 6 per cent yield, a customer would need to deposit at least US$1,000 into an account. Customers would also have to be signed up for X’s premium services, which is at least $8 a month. It would require at least a deposit of $1,600 to cover X’s premium services cost.
Musk has long talked about turning X into an “everything app” that would include financial services. Musk has his origins in financial services, creating one of the first online banks under the brand X.com. That company was later bought and merged into what is now known as PayPal.