As Elon Musk goes to war with advertisers – a sort of adoption through litigation approach – some of the fundamental directions in X’s road map commence. One we’re particularly interested in is X’s potential as a super-app. These are apps that let you do everything from order movie tickets to sell your car.
Also known as “everything apps” the model has been validated in Asia by the likes of WeChat. And a central tentpole in this model is having payments functionality. Messaging and social/follow graphs (network effect) are other tentpoles, which X already has. So payments are the missing puzzle piece.
For these reasons – and Musk’s former life at PayPal – we’ve long anticipated payments from X. Heck, Musk has even telegraphed this plan, and the broader super-app strategy. So all the pieces are gradually being assembled for a super-app – potentially the first one in the Western world (more on that in a bit).
Sticky & Super
The reason we resurface this discussion now is that the latest domino has fallen for the payments piece. Specifically, app researcher Nima Owji found experimental code for a “Payments” button in the X navigation bar. There was also code that referenced functions for “transactions, balance, and transfer.”
Beyond payments, such as peer-to-peer transactions, Musk’s plan involves other personal finance components such as investing in high-yield money market accounts – directions similar to Apple Pay/Wallet. These could engender stickiness in X, beyond its current function in social communications.
Evidence for these personal finance directions not only flow from Musk’s public comments, but actual moves from X (Musk says a lot of things… you never know what to believe). For example, the company is showing its commitment through the onerous process of obtaining state licenses for transmitting money.
As background, obtaining such licenses is a core challenge in building payments functionality into any app. And these occur on an individual-state basis in the U.S.. X is now up to 33 states including North Dakota, Alabama, California, Illinois, Louisiana, Nebraska, Utah, Ohio, and Oregon to name a few.
BREAKING: X Payments is coming soon! pic.twitter.com/8JBIHjHOls
— Nima Owji (@nima_owji) August 5, 2024
Name of the Game
Considering all these hoops to jump through, one question that emerges is, why? As Scott Galloway says, super apps are the holy grail of the app world. This is because the model contains what we’ve been calling the 3 s’: stickiness, scalability, and sustainability. That last one is all about recurring revenue.
Another question is, can X pull it off? Again, the model has worked well throughout Asia, given pervasive super apps like WeChat. But it hasn’t landed in the U.S.. As we’ve theorized on This Week in Local, this could be because no one has been able to execute the model… or because it’s culturally mismatched.
That last part stems from a not-necessarily endemic American attitude to pick and choose the best apps for various functions – from social to messaging to communications. Does shoving all these functions into one app go against established behavior? And if so, what’s it going to take to shift the paradigm?
For one thing, any potential super app requires excellence across the board or it risks becoming a “jack of all trades; master of none.” To prevent users from fleeing to other point solutions for a given super app’s features (payments, chat, etc.), it has to nail them all. So that will be the name of the game for X.
