Elon Musk's X launches X Money with early pay and 6% yield
But why are experts concerned?
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- X launched X Money for US Premium subscribers, offering payments, direct deposits, bill pay, and a Visa debit card.
- The service uses Cross River Bank infrastructure and Visa Direct, with eligible funds covered through an FDIC-insured sweep program.
- Users can earn up to 6% APY on deposits, 3% cashback on eligible purchases, and a $15 welcome bonus.
- Senator Elizabeth Warren warned X Money could pose consumer, national security, and financial stability risks.
Key Takeaways by nexos.ai, reviewed by Cybernews staff.
Elon Musk’s X has officially launched its own payment service, allowing you to send money instantly to other X users and offering a variety of perks like up to 6% interest on eligible deposits and up to two-day early direct deposit.
The service, branded X Money, is not a bank on its own. It relies on the banking infrastructure provided by Cross River Bank, and also includes integration with Visa Direct for real-time money transfers.
The previously invite-only service is currently limited to US Premium and Premium+ subscribers who are over 18, live in the US, and have a US phone number.
In short, X Money ffers peer-to-peer payments, direct deposits, bill payments, and an X Money account, all within X. It also comes with a physical branded Visa debit card, "the X card", that can be used at any ATM.
Users will be able to use the service much like a bank account to send money, pay bills, receive paychecks through direct deposit, and transfer funds to or receive them from other X users.
New users receive a $15 welcome bonus. Customers can also earn a 6% APY on deposits and 3% cashback on eligible purchases made with the X Card. In order to earn the 6% yield, a customer would need to deposit at least $1,000 into an account.
In comparison, the national average savings account interest rate in the US is between 0.38% and 0.62% APY according to different estimates.
Cashback is reportedly not available on cash withdrawals, gambling, or cryptocurrency purchases.
“Security is at the core of X Money,” the company said. “Your Money account is secured with passkeys for safe and fast authentication. Set custom limits and require authentication for the transactions you choose.”
X said that every card transaction is protected by Visa’s security and risk management capabilities, and funds are eligible for FDIC insurance of up to $10 million through its Cash Sweep Program.
To use the service, users must be subscribed to one of X’s premium plans. The subscription prices are $8 per month for Premium and $40 per month for Premium+.
Earlier in April, Senator Elizabeth Warren expressed concerns that X Money could pose a risk to “consumers, our national security, and the stability of the financial system,” pointing out Musk’s “track record operating X.”
At the time, Warren also said that Cross River Bank faced a “serious enforcement action” by the Federal Deposit Insurance Corporation (FDIC) in 2023 for “unsafe and unsound practices related to fair lending.” She called the bank “a repeat offender, as it was subject to a previous FDIC enforcement action in 2018 for unfair and deceptive practices.”
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She added: “It is unclear what risky investments, intrusive data monetization activities, or gimmicks either X Money or Cross River may intend to engage in to pay that yield when the target Federal Funds Rate is 3.5-3.75 percent.”
An X-integrated payment platform has long been a plan for Musk, who said during an X staff meeting in 2023 that, “If it involves money, it’ll be on our platform.”
