BlueSky and X Race To Integrate Payments

Key Takeaways

• BlueSky COO Rose Wang announced plans to build an in-app payment system.
• Meanwhile, X’s long-awaited payment feature could be imminent.
• For both social media platforms, payments offer an alternative revenue model that doesn’t rely on advertising or subscription fees.

With X preparing the ground for its long-awaited in-app payments feature, rival platform BlueSky Social is looking to get in on the action, too.

In a recent podcast, BlueSky COO Rose Wang announced that the company has plans to build its own in-app payment system to drive monetization. But as X and others have learned, doing so is far from straightforward.

BlueSky Floats Payments to Generate Revenue

As the hot social media app of the moment that has benefited from an influx of new users who became disillusioned with X under Elon Musk, BlueSky has come under pressure to build a profitable business model.

Unlike most of its peers, the platform doesn’t currently support advertising, and CEO Jay Graber has previously expressed her view that any move to “enshittify the network” with ads risks ruining the user experience.

However, without ads, BlueSky will eventually need to start charging users or find another way to generate revenue.

Discussing the topic on Thursday, Dec. 20, Wang said BlueSky plans to launch a premium subscription service next year. However, “we would never put [core features] behind a paywall,” she insisted.

Another idea she floated was that BlueSky could launch a payment system from which it would earn a transaction fee.

“Where we want monetization to go is to align our incentives with our users, creators, and developers,” That way, “as they’re making more money, we should be making money,” she stressed.

Wang said the company’s goal is to “build a payment system that enables these payments to work on the app and across other apps in the ecosystem.”

Following in X’s Footsteps

If Wang’s vision for BlueSky as an expanded digital ecosystem that enables “events, shopping, and your online presence” powered by a single payment system n sounds familiar, that’s because it is.

Shortly after buying Twitter in 2022, Musk stated his ambition to integrate payments on the platform, recalling his first major business success with PayPal.

He has since detailed plans to turn the social media platform into an “everything app” spanning news, video, retail, and, in his latest comments, email.

To connect the whole system together and drive revenue for its owner, X Payments was set up in 2023 and has been granted money transmitter licenses in 39 U.S. states.

In October 2023, Musk said X Payments would be ready to launch “in a few months,” but nothing ever materialized.

Then, on Nov. 26 this year, he shared a screenshot of Joe Rogan’s X profile with a “$” symbol next to the profile picture, sparking fresh speculation that the feature is imminent.

The Holy Grail of Social Media Monetization

Even before Musk bought Twitter, social media platforms had long flirted with the idea of introducing their own payment platforms.

The most ambitious of these was Facebook’s Diem/Libra. The company spent years and billions of dollars developing the blockchain-based stablecoin, even designing a whole new programming language for the project. But regulators ultimately nixed it.

Post-Libra, platforms have been reluctant to go it alone. For example, TikTok has partnered with Stripe, JP Morgan, WorldPay, and others to offer in-app payments in multiple markets.

However, as X and BlueSky’s moves in the space demonstrate, the idea never completely went away.

As X has learned the hard way during Musk’s tenure, advertising revenue is far from guaranteed. Meanwhile, convincing people to pay for a service they are used to getting for free is always going to be challenging.

Given these factors, it’s easy to see why payments are something of a holy grail for social media platforms.

There is a reason why Big Tech players like Google and Amazon have invested too much time and effort into building their own payment infrastructures. In a digital economy driven by trends, where true user loyalty is almost unheard of, the continued flow of money between consumers is one of the few certainties.