X is building XMoney as a payment rail that bypasses Visa/Mastercard entirely. Claims merchant fees will undercut existing processors (likely sub-1% vs typical 2-3%) and in some scenarios merchants get paid to accept it—probably through incentive programs or data monetization.
The friction claim is interesting: smoother than Apple Pay suggests tap-to-pay without NFC dependencies, possibly QR-based or direct app-to-app protocol. No existing network means they're not piggybacking on card networks or ACH—likely building on crypto rails or a proprietary ledger system.
If they pull this off, the economics flip: merchants currently lose 2-3% per swipe, so even breaking even would be disruptive. The real question is settlement speed and fraud liability—current networks eat chargebacks, unclear who holds the bag here.
The friction claim is interesting: smoother than Apple Pay suggests tap-to-pay without NFC dependencies, possibly QR-based or direct app-to-app protocol. No existing network means they're not piggybacking on card networks or ACH—likely building on crypto rails or a proprietary ledger system.
If they pull this off, the economics flip: merchants currently lose 2-3% per swipe, so even breaking even would be disruptive. The real question is settlement speed and fraud liability—current networks eat chargebacks, unclear who holds the bag here.