{"id":54358,"date":"2020-01-25T15:18:15","date_gmt":"2020-01-25T14:18:15","guid":{"rendered":"https:\/\/intellias.com\/?p=54358"},"modified":"2023-05-15T12:27:23","modified_gmt":"2023-05-15T10:27:23","slug":"super-app-as-the-future-of-fintech-become-a-platform-not-a-solution","status":"publish","type":"blog","link":"https:\/\/intellias.com\/super-app-future-of-fintech\/","title":{"rendered":"Super App as the Future of FinTech: Become a Platform, Not a Solution"},"content":{"rendered":"

Once upon a time, banks were the only way to make payments. But with the arrival of FinTech, things have changed. We now have multiple apps for settling all sorts of financial affairs straight from our phones and laptops.<\/p>\n

The variety of choice may be an awesome thing. But it also creates decision fatigue. The average user has 80 (!!!) apps<\/a> installed on their phone but uses just 40 of them each month.<\/p>\n

So do we really need yet another app, especially when it comes to finances?<\/p>\n

Or do we need a Super App to rule them all?<\/p>\n

What\u2019s a Super App?<\/h2>\n

A Super App is a product that combines a bunch of services and allows third-party developers to integrate mini programs inside the main product.<\/p>\n

If you want a deeper take on Super Apps, Kenta Nagamine has published a great piece<\/a> on Medium going into all the nitty-gritty.<\/p>\n

So I\u2019ll just throw out a quick example: think about iMessage<\/b>, with all those add-ons you can install such as instant translation, ETA, and tons of funny stickers. You can also connect Apple Pay Cash and send Venmo-style payment requests to your friends.<\/p>\n

Now picture this: instead of merely sending cash back and forth to your contacts, you can actually book and pay for a doctor\u2019s appointment, ask for a small loan, or book a hotel without reaching for your card.<\/p>\n

If you\u2019re in China, you can already do that with WeChat.<\/p>\n

\"Super<\/p>\n

The case of WeChat<\/h2>\n

WeChat\u2019s average revenue per user (ARPU) is estimated to be at least $7<\/a> \u2014 that\u2019s 7 times the ARPU of WhatsApp, the largest messaging platform in the world.<\/em><\/p>\n

WeChat was launched in 2011, primarily as a messaging app for sending text and voice updates and pics to friends and family.<\/p>\n

Back then, China had really low email penetration rates. Texting and voice plans were expensive, while SMS spam prevailed. Tencent, WeChat\u2019s parent company, already ran a popular web messaging platform called QQ. But then smartphones started taking off. By 2015, 90% of Chinese<\/a> internet users were browsing the web on mobile.<\/p>\n

And here\u2019s another thing about China \u2014 the credit card penetration rate was rather low.<\/p>\n

Local society was running on cash. To a large extent, it still does, as China has the world\u2019s biggest unbanked population \u2014 225 million<\/a> live without access to traditional banking services.<\/p>\n

But do those people really need a traditional credit\/debit card when they have a WeChat wallet?<\/b><\/p>\n

The WeChat payment service allows you to pay for goods and services online and in-store. At a brick-and-mortar location, all you need to do is scan your barcode to pay. Shopping online is even easier. You just connect with a merchant inside the app and pay in a few taps.<\/p>\n

However, the WeChat \u201cwallet\u201d is not a traditional mobile wallet per se. It\u2019s a marketplace<\/a> with carefully curated, pre-approved service providers that users can transact with \u2014 taxis, doctors, government services, and even celebrities. When spending money is as simple as a few taps, usage stats skyrocket.<\/p>\n

In 2017, China\u2019s mobile payments reached over $5.5 trillion<\/a>, roughly 50 times the size of the US market.<\/p>\n

And here\u2019s another important thing about WeChat.<\/p>\n

Its ecosystem, now populated with 1 million<\/a> \u201cmini apps,\u201d was not 100% homemade. Most of the cool features and services within WeChat are deployed by third-party developers \u2014 companies who rushed to get a slice of WeChat\u2019s user base. Those mini apps offer a seamless experience with other businesses (e.g. an e-commerce company) while never asking the user to leave WeChat\u2019s ecosystem.<\/p>\n

As well, such programs are cheaper and easier to develop than native apps. They often become an ideal MVP solution for startups and services that lack substantial reach.<\/p>\n

Finally, consumers are offered a smooth and secure payment experience, with automatic authentication of identity and payments as well as careful vendor vetting. So no wonder Chinese consumers are spending big time on WeChat.<\/p>\n

But can a similar Super App model settle down in the West?<\/p>\n

Facebook\u2019s Libra + Calibra: Taking a page from WeChat\u2019s book<\/h2>\n

Rumors that Facebook was looking for a way into the payments market have been circulating since 2014.<\/p>\n

But with all the bad data privacy rap and anti-monopoly sentiment among global legislators, Facebook obviously knew that treading the traditional regulatory waters would be tough. Getting a charter or banking license would be nearly impossible. From that standpoint, the blockchain seemed like an obvious choice.<\/p>\n

So now we\u2019re facing Calibra<\/b> \u2014 the company\u2019s shining new digital cryptocurrency wallet to pair with the platform\u2019s Libra<\/b> cryptocurrency.<\/p>\n

As explained so far, Calibra will be aimed at doing two things:<\/p>\n