What Lies Ahead for The XMoney-Visa Partnership?

Leveraging tie-ins with sister companies to facilitate payments and converting fiat currency to cryptocurrency are some of the possibilities that lay ahead for XMoney, the digital wallet from social-media platform X, in the wake of its partnership with Visa Inc.

Enabling Tesla charging stations to accept the wallet is an obvious low-risk starting point, payment experts say. Tesla claims more than 60,000 supercharger ports globally. Tesla reportedly operates 7,000 charging stations worldwide, with more than 2,800 located in North America. “Enabling XMoney to be accepted at Tesla charging stations is a low-risk option,” says payments consultant Cliff Gray.

XMoney announced its tie-in with Visa last week.

Adding XMoney as a payment option could also pose an incentive to significantly grow the Tesla charging-station base, Gray adds. More charging stations would mean more potential transaction volume, which X could then leverage to push for a lower acceptance rate from Visa. Or X could issue its own Visa-branded credit card, Gray adds.

“Using a Tesla-branded Visa card at a Tesla charging station means that Tesla can make money on charging and on payments…it’s an instant win for XMoney,” says Gray.

Extending XMoney acceptance across other companies operated by X owner Elon Musk is another option, as it could provide XMoney with a ready-made user base that could generate significant transaction volumes.

“If X creates a full-stack payment solution like PayPal Fastlane, you will see it spread across all (Musk-owned) companies,” says Michael Seaman, chief executive of processor Swipesum, by email. “Incorporating a robust payment infrastructure, X is well on its way to becoming a unified platform where users can socialize, shop, and transact effortlessly.”

Initial indications are consumers will embrace XMoney. A survey conducted by Auriemma Consulting Group Inc. in October revealed 33% of debit cardholders would be interested in using a digital wallet like Xmoney, up from 28% in the second quarter of 2023.

Another possibility for XMoney is that it could be used to champion cryptocurrency as a mainstream payment option that could be loaded into the wallets and converted back to fiat currency, according to Gray. Musk is well-known supporter of cryptocurrency. 

“Conversion is where the real money is at in crypto, and most of the conversion from fiat to crypto takes place on a card,” Gray says. Visa would like such an arrangement because it means even more volume for its network, which would in turn generate network fees, Gray argues.

Adds Swipesum’s Seaman: “With Visa’s robust investments in the crypto space, the integration of digital assets into X’s platform seems not only plausible but likely. Will we see Dogecoin on X? I’m betting on it.”

Despite these possibilities, it is not a slam dunk XMoney will become an instant powerhouse among digital-wallet providers, payments experts say.

XMoney “is entering an increasingly crowded space that’s been difficult even for other tech giants,” Jaclyn Holmes, director of research and partnerships for Auriemma Consulting, says by email. “Uber had big aspirations of being a super app and eventually decided to discontinue their credit card. Meta Pay did not take off as [Meta] may have initially expected.”

Another hurdle is that many consumers already use a variety of other payment options from online-only banks, digital wallets, and per-to-peer payments providers. “X will need to provide a compelling value proposition to ultimately motivate [consumers] to make the switch,” Holmes adds.

With that being the case, it is likely XMoney would be well-advised to generate volume on its own platform, as opposed to competing social-media platforms, some observers say.

“XMoney will probably do well with purchases in X, but I’m not sure that they can effectively compete with Meta on Facebook or Instagram,” says Thad Peterson, a strategic advisor at the consultancy Datos Insights. “I’m having a hard time understanding why a consumer would use their X wallet to pay for something on Facebook when the customer may well already have a payment facility on Facebook. It seems like the logical outcome is that the social-payment ecosystem will be siloed by platform.”