The Battle Among Banks, Fintechs, and Super Apps

As the name implies, super apps are super in nature. They differentiate themselves from traditional apps by offering a much wider variety of services than fintechs typically offer, acting as platforms that fulfill more than just a singular purpose.

We recently spoke with Marcell King, Chief Innovation Officer of Payveris, for his view on the battle among banks, fintechs, and super apps, as well as his outlook on the future of super apps both in the U.S. and abroad.

What’s your definition of a super app?

Marcell King: A super app is a single place for users to go to for all of their financial, communication, money movement, entertainment, and shopping needs. It’s designed to provide consumers with the utmost convenience and frictionless access to a variety of services they use on a day-to-day basis. A super app earns a piece of the spend on everything the consumer purchases and can leverage this data to deliver personalized experiences and cross-sell products or services. The consumer gets ultimate convenience and the owner of the Super App increases the size of its revenue pool.   

How do Super apps threaten FIs and fintechs? 

King: The possibility of one dominant super app emerging in the US poses the biggest threat to smaller-asset financial institutions in particular because they often can’t match the resources Big Tech and Big Finance bring to the table. This answer grows more complicated depending on how you define what constitutes a true “fintech” company these days. Many fintechs have developed micro-niche applications, which a super app could likely consider to be a “feature” in the app. In that case, it would be easier for a consumer to access the feature in the super app versus opening up another app for the same purpose.

What opportunities do super apps have for Fis and fintechs?

King: I believe this could go one of two ways, or both. Use case number one is that the super app partners with specific types of financial institutions and fintechs for specific white label services. For instance, PayPal could partner with a large bank to support added new financial management features, offering consumers checking and savings accounts from the partner bank or credit union. The other is that multiple financial institutions link their branded services to the super app brand, enabling the super app to be a consolidator of services, similar to a brick and mortar mall. In both cases, the super app uses its brand power to consolidate services, making it easier for the consumer to get the benefit of convenience. The super app generates revenue and receives data that can be leveraged to cross-sell relevant products and services to that individual consumer. 

Why haven’t super apps been successful in North America and Europe?

King: There are a few reasons for this. First, with intense competition between tech giants, the market is more fragmented with popular services such as Facebook’s WhatsApp and Apple’s iMessage. There isn’t one player dominating a specific part of the market, which makes it more challenging to create a super app experience. 

Another reason is super apps rely on a plethora of user data to be successful, which is a challenge in the U.S. and Europe, where there are more laws in place to govern consumer data and privacy. Both countries have a record of limiting the growth of companies that become powerful to protect consumer rights. Most recently, the U.S. Consumer Financial Protection Bureau issued orders for info to tech giants, including Google and Amazon, on their use of consumer data. This will make it more challenging for one company to become a dominant super app. 

What will it take for super apps to gain popularity in geographies outside of Asia?

King: We’re beginning to see the super app model emerge in places like Latin America. Due to regulation, it’s clear that North America and Europe will need government support in order for super apps to gain popularity. For instance, China’s WeChat and AliPay have benefited from strong government support and its regulation to block WhatsApp, Signal, and Facebook, which has removed the risk of competition. 

A super app will need to gain popularity and trust in one market in which it can then expand into other services to succeed. Uber, for example, started out as a rideshare app disrupting a legacy industry when ridesharing was an untapped market. Even with competition emerging since its inception, Uber commands a majority of the market share. Due to its early success, Uber has been able to expand and establish itself as a top meal delivery service.

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