Elon Musk launches his own X bank that will pay your wages two days early
Elon Musk has launched X Money, a new payment service on X that offers six percent interest on savings, three percent cashback and the chance to get paid up to two days early.
For now, X Money is only available to US Premium and Premium+ subscribers who are over 18, live in the US and have a US phone number.
Some of the benefits include sending and receiving money for free, saving a Visa debit card in the app and being able to use a virtual card with Apple Pay.
New users also get a $15 welcome bonus, with customers being able to earn three percent cashback on most purchases made with the X Card wherever Visa is accepted.
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However, cashback is not available on cash withdrawals, gambling or cryptocurrency purchases.
Users will also receive ‘the X card’, which is a physical Visa debit card for ATM withdrawals and in-person transactions.
How the six percent interest rate works
Musk's six percent interest rate is available automatically for Premium+ members, while premium members can also get it if they set up direct deposit into their X Money account.
For context, the national average savings account interest rate in the US is a very low 0.38 percent to 0.61 percent APY.
Notably, X is not a bank, as customer money is held by Cross River Bank, which is protected by FDIC insurance.
“Security is at the core of X Money,” the social media giant says.
“Your Money account is secured with passkeys for safe and fast authentication. Set custom limits and require authentication for the transactions you choose.
“Every card transaction is protected by Visa’s security and risk management capabilities.
“FDIC insurance up to $10M through our Cash Sweep Program.”
Concerns over the six percent interest rate promise
Some experts have questioned whether X can afford to pay such a high interest rate. Others have raised concerns about security and regulation.
US Senator Elizabeth Warren has warned that X's move into banking could put consumers and the financial system at risk.
“If your track record operating X is any indication of how you’ll operate X Money, consumers, our national security, and the stability of the financial system may be at risk,” she wrote in an open letter to Musk in April.
“Your failure to operate X in a safe and responsible manner does not breed confidence in your ability to safely expand into consumer finance.”
She added: “As I’m sure you’re aware, Cross River Bank was subject to a serious enforcement action by the FDIC in 2023 for unsafe and unsound practices related to fair lending.
“The bank is a repeat offender, as it was subject to a previous FDIC enforcement action in 2018 for unfair and deceptive practices. In addition, the X Money preview materials suggest that users can earn up to six percent APY on deposit accounts.
“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.”
Despite concerns, X Money is Musk's biggest step yet towards creating one app where people can message, shop, pay bills and manage their money.
Topics: Elon Musk, Technology, Celebrity, Money
Anish Vij