Elon Musk, the world's wealthiest man, has been struggling to find ways to increase profits for his struggling social media platform, Twitter (NYSE: TWTR). After laying off at least half of its staff and floating the idea of an $8 per month subscription for verification, the company is now apparently looking to get into the payments business.
To get the funding needed to buy Twitter, Musk took out $13 billion in loans. If the loans aren't paid off, it's going to cost the company $1.2 billion in interest charges over the course of the next 12 months. Musk also recently tweeted that the platform had been losing $4 million every day since he took over thanks to a wave of advertisers dropping out.
"Leverage could spike into the double digits unless Mr. Musk contributes significantly more equity than previously contemplated or significantly improves profitability," reads a credit research note from S&P Global analysts.
Adding a payment function wouldn't guarantee more business, but if Musk can convince people to use the service, it could be a significant source of revenue. In other discussions about increasing Twitter's cash flow, Musk has discussed charging users to direct-message celebrities and introducing pay-walled videos.
Musk has mentioned the idea of adding payment processing to Twitter in the past as a part of his plans to make the platform into an "everything app", modeled after China's WeChat. WeChat, with more than a billion users, is a popular platform for hailing cabs, ordering food, and reading the news. In some ways, adding payments to Twitter would be a return to form for the tech CEO, who helped create PayPal (NASDAQ: PYPL) soon after entering the industry.
Twitter has made small forays into the fintech industry before. As of last September, creators on the site can charge their followers for exclusive content and users can tip creators of their choice.
Rather than learning this news via an announcement from Twitter itself, The New York Times obtained Twitter's application for registration with the Treasury Department's Financial Crimes Enforcement Network (FinCEN). In order to begin processing payments, companies need approval from FinCEN. After registration, companies also have to report suspicious transactions to the agency.