Would you store your money with Elon Musk?

The question sounds hyperbolic, but in essence, that's the several trillion dollar question at the heart of Musk's "everything app," that he'll be able to convince hundreds of millions, billions of people to store all their money on his X platform in order to use those accounts to execute a wide variety of financial transactions, all in-stream.

Musks approach-to his history in developing the first iteration of PayPal-facilitating payments is never enough, apps such as PayPal should do so much more, than providing banking services, loans, credit options. In essence, Elon says, "if online apps can cater for payments, then why can't they replace banks wholesale, and enable simple, fee-free funds transfer, in various forms, to streamline and improve banking system?

Theoretically, this makes sense. According to McKinsey, the average US household generates around $2,700 in banking revenues each year, based on fees and charges attached to their various accounts and loans, and that amount rises significantly for those earning over $100k. Just imagine if you did not have that extra cost or could limit those charges through another way.

One of the major use cases is remittance. Remittance sends over $100 billion back into Indian families each year, and all of that money is subject to transfer fees and costs, much of which costs families who need their money the most.

On one hand, cheaper and faster transfers are an obvious bright future case. But making it a reality is no easy feat.

Meta learned the hard way. For the past decade, Meta has tried various forms of in-stream payments, all of which have been opposed by various governments and regulators in different regions.

Meta's big payments push was Diem, its in-stream currency, which it hoped would let it bypass existing financial frameworks and bring more money into its ecosystem.

Back in 2019, Meta announced the first stage of what was originally titled its "Libra" cryptocurrency project, which would offer fee-free transfers and payments in the app.
Meta leaned on another former PayPal executive to lead the project, in David Marcus, but after three years of being put through the regulatory ringer, Meta eventually gave up on the project entirely last year.
Why?

Because those making decisions on such projects did not trust that Meta should be trusted with the responsibility of dealing with payments, which could put more people at higher risk.
The project was seemingly doomed from the start because big-name launch partners promptly cancelled out after scrutiny from US regulators, who questioned Meta's push to get into payments. That oversight attention eventually forced Meta CEO Mark Zuckerberg to testify before the House Financial Services Committee in defense of the effort, but after trying all angles and avenues, the project was ultimately closed, and Meta turned its attention to meeting payments via Meta Pay, which is also facing significant pushback from many regulators.

The problem is that those making such decisions do not feel comfortable allowing social media networks to become payments providers as well, given their collective track record on data security, privacy etc. There's the added fact that the powerful banking lobby is urging politicians to oppose any such move, making the wall confronting social apps looking to move into payments become very significant. As such, it's going to be increasingly difficult for any individual platform to facilitate full payments in-stream, let alone banking, loans, and whatever else may come of such.

It's hard to see Elon Musk, who's made his dislike of the SEC and FTC very public, gaining the required nods and ticks to go ahead on his own all-encompassing payments app vision.

Maybe, there is some other leverage that the world's richest man can lean on to force his will and make this happen, and maybe there is another avenue that Meta could not find in its development process.

At least, at present it is difficult to imagine how X can be that next-generation application, as with Chinese messaging platforms like WeChat, deep-rooted in everyday life. Your WeChat barcode is a sort of digital identity in many ways on the Chinese mainland, but will X be able to do the same, and become the critical connector, for everything, as Musk envisions?

He's definitely going to attempt. X already has prepayment licensing agreements in several US states, which is a pivotal first step toward realizing this thrust.

And Elon has experience in hard niches.

If it were anyone else, I think the payments proposal would have been dismissed already, but nobody can be that bold to bet against Musk, and what he may be able to do, based on past history. 

But even if he can get all the approvals, the question remains. Would you entrust your life savings to a platform run by Elon Musk?