Twitter Files Registration for Money Transmitter Business

A new regulatory filing with the U.S. Treasury Department Financial Crimes Enforcement Network (FinCEN) unveiled “Twitter Payments LLC,” a subsidiary of Twitter that will process payments. Twitter Payments LLC will be a money transmitter – essentially a third party that can relay money from a sender to a recipient.

The application was filed on November 4, 2022. It describes plans to operate in the United States and several U.S. territories. Despite past disagreements that Elon Musk had with California over its response to COVID-19, the Twitter Payments registration indicates that it will be based in San Franscisco, CA.

There aren’t many details on what “Twitter Payments LLC” will look like. It could end up wrapping the cryptocurrency wallet that Musk floated and then nixed into a “Twitter wallet” that can hold cash and crypto for Twitter users.

Twitter as an All-in-One Online Marketplace?

Elon Musk could be straying into familiar territory as the former founder of the online bank, which was later acquired by PayPal, which was in turn acquired by eBay.

Musk floated the idea of reviving it as an all-in-one “X App” that could handle nearly everything that you probably already use multiple apps for. An “X app” could be your social media account, food delivery service, favorite ecommerce site, and ride-hailing app all rolled into one. He implied that buying Twitter was a way to speed up the process with its built-in user base and name recognition. (To be fair, a lot of people already close their accounts, but…)

This time, crypto exists. Binance has a minority stake in Twitter now that Musk completed the highly dramatic task of taking Twitter private.

Twitter already partnered with a few NFT marketplaces to test a new feature that enables NFT trading directly on Twitter. That could be expanded to a marketplace where physical and digital goods are bought and sold using a future “Twitter Payments” app.

An ideal situation would be transacting in U.S. dollars or one of the top cryptocurrencies without too much of a headache getting set up. There will always be regulatory requirements like KYC/AML. However, a good mobile or desktop app won’t make it impossible for users to get over these hurdles.

Anything that involves both crypto and Twitter will probably also involve Elon Musk’s favorite cryptocurrency, Dogecoin. Dogecoin bounced to 12 cents when the deal to take Twitter private closed, though it has now slid with the rest of the crypto market due to this week’s dumpster fire involving Binance and the disintegrating FTX exchange.

Make your own payment processor, or use somebody else’s?

A few existing payment processors like Jack Dorsey’s Block, the Cash App, Binance Pay, and Coinbase Commerce have been floated as a possible way to handle payments on the “X App.” These are all already-functional payment options that could be integrated into a new online platform for buying and selling.

However, Elon Musk has a history of wanting to do most things in-house if he can. Tesla’s Model 3 topped’s list of most American-made cars because he insisted on doing as much of the manufacturing and assembly of cars for the North American market at Tesla’s American factories in Nevada, California, and (now) Texas as possible. SpaceX manufactures its own rockets and also makes the Starlink satellites that provide high-speed Internet from low-Earth orbit.

One of the perks of doing things in-house is that it’s easier to include a comprehensive wishlist for a payment processor. Who wants a payment processor that takes debit, credit, and Dogecoin? How about one that can handle subscriptions and a “Buy Now, Pay Later” option that can take the monthly payments out of crypto you already uploaded to the app? That’d be cool, right?

But who knows what Elon Musk is thinking at this point? He may have made noise about getting rid of bots and imposters and enabling free speech (and who knows how good his track record will be in that respect at this point). However, he may mostly want Twitter as the base of an “X App” with a built-in userbase. Twitter Payments LLC is likely to be part of that.