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 its services, as chartering a new bank is a timely and costly process.
Currently X Money is invite only, and users will receive a “X”-branded Visa debit card that is useable 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.
In order to attract customers, X Money is offering a 6% yield on deposits and 3% cashback on eligible purchases. In order to earn the 6% yield, a customer would need to deposit at least $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 in order 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.
It's still early for X Money, but the company is entering into a competitive market, dominated by PayPal's Venmo money transfer service and other peer-to-peer money transfer services like Zelle and Cash App.
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