Considering it can cost thousand of dollars or time, such as sending documents, to verify accounts, this is a good deal , assuming it actually confers a blue checkmark and consequent privileges
This almost certainly involves a massive streamlining (and reduction in rigor) of verification. Most identification verification processes online don’t take thousands of dollars of time, and the whole point is to take “verification” from a thing for a very narrow elite to a thing for a (Musk hopes) very wide paying audience. Musk has been clear since very early that he wants to convert Twitter to a mostly-paid social network by merging Blue and verification, making the former more attractive to support a higher price and the latter far more widespread.
Payment connects you to a payment identity.
Ban payment identities that fraudulently pretend to be someone else on their name and profile.
Twitter's blue checkmark is more "this person is notable", which is a different thing and maybe valuable, although I think makes the blue checkmark probably a constant source of frustration for twitter.