Musk launched financial platform X Money

Elon Musk’s X Company has begun launching a financial platform called X Money, which combines payments, debit card, money transfers and interest payments on deposits.

Now the service is gradually expanding to new groups of users of the social network X in the United States. The service was initially launched for Premium+ subscribers in the United States, but in recent days access has been expanded to other verified users.

According to company management, the goal of the phased launch is to test the system in real time and collect feedback before a large-scale expansion of the service.

Users of the platform can transfer money between X accounts, pay bills, make bank transfers, use a personal Visa metal card and receive 3% cashback on purchases. In addition, the company offers a 6% annual return on account balances.

One of the notable elements of the product is the deposit insurance system. Most users’ funds are deposited with Cross River Bank of America, which is covered by regular FDIC deposit insurance up to $250,000. Premium+ subscribers can also enroll in Cash Sweep, which distributes funds across multiple banks and provides up to $10 million in total coverage.

Although it looks like a bank account, X is not a bank and does not have a banking license. The service is built on a Banking-as-a-Service model, in which the bank provides the regulatory infrastructure and account management, and X is responsible for the user experience and operation of the application. The payment infrastructure is also built on external partners: the company uses the Visa Direct network, which allows money to be transferred in near real time – rather than relying on the traditional bank transfer system, which sometimes takes several business days.

The 6% return on deposits generated the most discussion. We are talking about a rate that is significantly higher than what most savings accounts in the United States offer today – despite the fact that the Fed rate is now lower. The company has not yet published the full conditions for the account, so it is unclear whether we are talking about a temporary benefit, whether there is a limit on the size of the deposit and what other restrictions apply to the product.