Twitter Inc (NYSE:TWTR) is seeking approval for a new payment tool which could rival the likes of PayPal, which ‘chief twit’ Elon Musk helped to set up in the 1990s.
Musk reportedly pitched the idea for the new Twitter function in May, before he bought the social media platform, claiming a payment tool could generate over US$1.8bn annually for the company by 2028.
Twitter has already filed for regulatory approval in the US, but will face tough regulation and competition, including ensuring each account is linked to a real identity to prevent fraud.
Musk introduced a verification service late last year, which sees users choose to pay between US$8 and US$11 per month for a blue tick on their profiles, previously only reserved for public figures and celebrities, though this led to a surge in fake and parody accounts.
The multi-billionaire, who co-founded online bank X.com in 1999 which later became part of payment giant PayPal Holdings Inc (NASDAQ:PYPL), has previously indicated he sees the social media company as a foundation for creating a "super app" that offers everything from money transfers to shopping and ride-hailing.
With the group seeking alternative ways to shore up revenue, a small team from Twitter's reduced workforce will focus on the project, led by product management director Esther Crawford, according to a Financial Times report.
Twitter has taken a 40% hit to daily revenue, according to reports, after around 500 companies paused advertising after Musk's takeover was followed by a slashing of the workforce from 8,000 to 2,300 since he took charge in October.
Operating transaction tools such as payments is often a "burden" for companies, according to MoffettNathanson analyst Lisa Ellis, particularly the long-term investment and risk. Fines and the need for compliance infrastructure lead to many firms experimenting, but ultimately giving up, she added.