No he didn't.

X.com was an online bank. Confinity created Paypal, which was the payment product we know today. X.com merged with Confinity and the resulting company was called X.com. They soon dropped the online bank service (the thing that Musk was working on) after the merger and changed the name of the company to Paypal. Musk was fired before the company was ever called Paypal, and he had nothing to do with the actual Paypal payment product.