Elon Musk put the payments industry on alert with filings that Twitter could enter the payments space in the near future. This move shouldn’t be a surprise, given Musk’s history with X.com and PayPal. The effects of Musk’s decisions with Twitter may highlight the risks of combining social media and payments. This specifically includes the ability to purchase a verified account. Brian Fung of CNN highlights the difficulty Twitter is already having battling impersonators on the site:
“CNN has confirmed multiple verified Twitter accounts have been suspended by the platform after other users posted screenshots showing misleading content from the accounts. The fake verified accounts had posed as former President Donald Trump, Rudy Giuliani, Nintendo of America, the basketball player LeBron James, the software company Valve and others.
Before being suspended, the impostor Nintendo account tweeted an image of the video game character Mario giving the viewer the middle finger. The LeBron James account falsely claimed the athlete had requested a trade. The fake Trump account tweeted, ‘This is why Elon Musk’s plan doesn’t work.’”
Increased Fraud with Twitter Impersonations
The immediate increase in verified, but fraudulent accounts has been brushed aside by Twitter. They have flagged many users as harmless. But most of these accounts are only seeking to shine a light on the ease of impersonation. However, those involved in cyber security are already concerned that the practice will lead to more nefarious actions. Bad actors who spend a relatively low sum of $8 a month can achieve financial or other deceptive gains:
“The wave of impersonations comes as Twitter enabled the ability for any user to purchase a blue check mark for their profiles without providing identity verification — a feature that information security experts warned would lead to widespread fakes and deceptive behavior.
Musk argued during a Twitter Spaces event with advertisers Wednesday that even wealthy bad actors such as state-sponsored disinformation agents would eventually be deterred because they may run out of credit card and phone numbers.
Asked by CNN to respond to that claim, Chris Krebs, the former director of the US government’s Cybersecurity and Infrastructure Security Agency, tweeted a GIF from the cartoon “Futurama” showing the character Fry narrowing his eyes in skepticism..”
Will Payments be Affected?
Twitter may be adding a payments platform into this mix of services. Twitter needs to be certain that its users are transacting in a safe, secure and regulated fashion. The rise in impersonations, if combined with seeking funds from users will certainly cross paths with regulators who are already battling, with little current success, peer-to-peer payments systems to cut down on fraudulent activities as I have covered in the past in PaymentsJournal. As other Mercator research has shown, P2P providers rank very low in terms of resolution and customer service. The combination of uncertainty around accounts and the lack of oversight into P2P fraud, given its equivalency to cash payments, should give pause to users who would potentially adopt a Twitter payments service.
In addition, it will likely bring additional scrutiny from both regulatory bodies such the Consumer Financial Protection Boards as well as legislative bodies who could seek to put additional pressure on Twitter via new laws or public hearings. While the payments service may or may not happen, the likelihood is that the actions taken by Twitter in the short term to mitigate impersonations and fraud via the new verified service will be of high interest to the marketplace as Twitter looks to expand its revenue options. A failure to curb the fraudulent accounts will be a deterrent in building trust with customers who are already leery of the customer service pf P2P providers.
Overview by Jordan Hirschfield, Director of the Prepaid Advisory Service at Mercator Advisory Group.