{"id":22562,"date":"2025-06-19T06:50:14","date_gmt":"2025-06-19T11:50:14","guid":{"rendered":"https:\/\/reformingretail.com\/?p=22562"},"modified":"2025-06-19T06:50:15","modified_gmt":"2025-06-19T11:50:15","slug":"x-visa-loser-heres-how-musk-should-think-about-his-super-app","status":"publish","type":"post","link":"https:\/\/reformingretail.com\/index.php\/2025\/06\/19\/x-visa-loser-heres-how-musk-should-think-about-his-super-app\/","title":{"rendered":"X + Visa = Loser. Here’s How Musk Should Think about His Super App"},"content":{"rendered":"\n

Elon Musk acquired X.com to turn it into a super app like the kinds you find in Asia<\/a>.<\/p>\n\n\n\n

His financial aspirations -at least as of right now – start with a Visa partnership.<\/p>\n\n\n\n

To move money.<\/p>\n\n\n\n

Between bank accounts.<\/p>\n\n\n\n

Except, because Visa’s involved, there will be fees.<\/p>\n\n\n\n

There are numerous ways to move money today. For free<\/strong>.<\/p>\n\n\n\n

If you’re lucky enough to be in Brazil or India, you have PIX and UPI, which are ubiquitous at merchants across their respective countries. Cost = $0 for bank to bank transfers (there’s a new credit rail coming that will rightfully have a cost for the borrower). <\/p>\n\n\n\n

For free funds transfers in the US you’re relegated to smaller P2P platforms that are mostly used by consumers: Zelle, Venmo, and a few others.<\/p>\n\n\n\n

Most US merchants don’t accept Zelle or other free, P2P payment types because the software providers that they use to run their businesses (POS, ERP, EMR, EHR, et al.) are embedding their own payments and have zero commercial incentive to do what’s in the best interest of the merchant.<\/p>\n\n\n\n

In fact, what’s in the best interest of the merchant is often in conflict with what’s in the best interest of their software provider’s shareholders.<\/p>\n\n\n\n

See the below from Square’s community forum<\/a>:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Embedded payments often earn the software companies far more money than their software does; go look at SHOP or TOST if you want examples for how this plays out in SMB, where the merchants get absolutely pummeled on payments.<\/p>\n\n\n\n

So the whole X and Visa tie up is a head scratcher.<\/p>\n\n\n\n

Why do we need another bank to bank payment service? Especially one that costs money?<\/p>\n\n\n\n

FedNow<\/a> is probably cheaper than whatever X is trying to do.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Visa earns about 20 bps per transaction; FedNow at a 20 bps cost parity implies a transaction size of $2.25 at the most expensive (Billing Codes 81100 and 81200) and $0.50 at the least expensive (Billing Code 81801).<\/p>\n\n\n\n

If X is anything like Venmo, that implies at average transaction size of $70<\/a>. With Visa’s 20 bps duopoly rate, someone is paying $0.14 to move that money.<\/p>\n\n\n\n

And we imagine X would want to make money.<\/p>\n\n\n\n

So pay > 20 bps to move funds banks to bank on X.com because???<\/h4>\n\n\n\n

If X wants to disrupt finance it needs to make the cost of moving money zero.<\/p>\n\n\n\n

Across hundreds of thousands of merchants.<\/p>\n\n\n\n

Super Apps Alipay and WeChat pay charge merchants less than 60 bps<\/a>.<\/p>\n\n\n\n

Compare that to the US cost of card acceptance at 2.2%. <\/p>\n\n\n\n

In China, home of the super apps, Visa and Mastercard charge 2%-3%; the Chinese government is asking<\/a> that they lower the cost of acceptance to 1.5%.<\/p>\n\n\n\n

But that would still be more than 100% the cost of acceptance on a super app.<\/strong><\/p>\n\n\n\n

Gee, why on earth would merchants adopt super apps so willingly…<\/p>\n\n\n\n

The lesson is for Musk is simple: if you want to succeed, create value.<\/p>\n\n\n\n

Rent-seeking by charging people to move money isn’t going to cut it.<\/p>\n\n\n\n

Lose the tie with Visa and build your own rail, much like Cash App has done over the past decade.<\/p>\n\n\n\n

No, it’s not easy.<\/p>\n\n\n\n

But that’s the point.<\/p>\n\n\n\n

There’s enormous value to be had in owning a free payment rail without rent-seeking.<\/p>\n\n\n\n

Must is smart enough to know what to do with the underlying data, so we don’t need to say more on the matter.<\/p>\n\n\n\n

But dude, tag teaming people with Visa does not put X on the path to a super app.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Elon Musk acquired X.com to turn it into a super app like the kinds you find in Asia. His financial aspirations -at least as of right now – start with a Visa partnership. To move money. Between bank accounts. Except, because Visa’s involved, there will be fees. There are numerous ways to move money today. […]<\/p>\n","protected":false},"author":1,"featured_media":23084,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"image","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-22562","post","type-post","status-publish","format-image","has-post-thumbnail","hentry","category-uncategorized","post_format-post-format-image"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/03\/Screen-Shot-2025-03-06-at-10.20.51-AM.png?fit=1840%2C1228&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p81nA2-5RU","_links":{"self":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/22562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/comments?post=22562"}],"version-history":[{"count":6,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/22562\/revisions"}],"predecessor-version":[{"id":23088,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/22562\/revisions\/23088"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media\/23084"}],"wp:attachment":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media?parent=22562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/categories?post=22562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/tags?post=22562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}