Where does crypto go from here?
Modulr’s Gavin Waddell shows the relevance of crypto payments, what super apps are and how they can monetize them, and what needs to be done to gain trust in crypto.
It’s a fascinating time for the crypto space, with many headline-grabbing changes to the status quo. But within disruption lies opportunity and forward-thinking companies have been preparing for this time of volatility for some time, building out other features that extend beyond crypto trading. These are the organizations that develop super apps, with crypto at their core, that aim to make cryptocurrencies a more regular and functional part of the financial mainstream.
While recent speculation surrounding crypto investments may have calmed down, what does the future hold and how will the industry withstand times of financial instability or even a potential recession?
At Modulr, mainstream payments is an area we are interested in, and we have a wide range of examples of how people are developing the use of cryptocurrencies. And we don’t think it’s game over for crypto at all. We believe the current climate could be the catalyst for prolonged industry consolidation and expansion.
After all, many still look to crypto to solve a specific set of problems or to offer a better solution than traditional banks. For example, there are situations where someone might want to send money to a place that is relatively inaccessible, with poor banking infrastructure. In that type of situation, using cryptocurrency or stablecoins may be preferable to traditional banking rails.
Michael Stroev, COO of Modulr partner Nebeus, believes we are likely to see a change in how people approach cryptocurrencies. “I would expect to see a little change, especially if we go into a recession. There’s going to be less fear of missing out, less hype. You’re going to have people who are slower to come in, but they’re going to be more educated at the same time. They are going to make more strategic investments, they are going to look at specific use cases and educate themselves about blockchain technologies and cryptocurrencies.
What do we mean by super app?
Fintech super apps give users access to a variety of different financial products through a single application. Although many claim to offer this, the reality of the payment experience often falls short and is far less comprehensive than one might expect.
At Modulr, we believe that if you manage the payment experience, and your offer is adopted as a daily account, the customer is more likely to use a wider range of features and engage much more with the application. So getting the payment part right is critical to accessing and using all other features.
And what does the Nebeus super app offer? “For Nebeus, it has always been our mission to bridge the gap between the financial and cryptocurrency worlds. We have always tried to achieve that through crypto-backed lending. But right now we achieve that by linking fiat money accounts to crypto accounts, with instant transfers between those accounts and access to cryptocurrency services on the go, and vice versa, explains Michael.
What super apps need to achieve
One thing that must be adopted, if crypto super apps are to succeed, is a seamless customer experience.
Those who got into crypto early or are part of the fintech world have an advantage in understanding crypto and how it works. But it can be quite intimidating if you’re outside the world of financial services and you’re picking up a crypto app or signing up for an exchange for the first time. And that’s not the experience you want to give a customer when they use your app to move and manage money. If your app is clunky and difficult to understand, chances are your customers will move on to another provider.
‘In general, I wouldn’t say that the space has been easy to use for a newcomer to crypto. Recently I needed to send some stablecoins to a friend and asked for his wallet address. He didn’t know what it was. And this is a person who has been investing in cryptocurrencies and buying stablecoins for the past eight months or so. This proves that an app that solves this, or at least educates people enough that they quickly understand what needs to be done, is going to outperform other apps.’ adds Michael. “This is one reason why we use different approaches on our social media and our blog – to educate different users, depending on whether they are more casual or looking for more in-depth information.”
Modulr works with crypto clients like Nebeus to enable a bridge between traditional payment rails (where most of the funds are still held) and the crypto platforms. Our APIs ensure this journey is seamless, providing a superior customer experience and better onboarding, plus the peace of mind of instant alerts when money enters an account.
Building trust in crypto
When it comes to payment providers, trust is essential. Historically, banks and payment providers have viewed the crypto world with suspicion, and in turn, crypto companies have questioned whether they even understand the space.
A good example of this is the sporadic and even volatile levels of payment activity, with investment trends resulting in massive increases in volume. While this might be considered normal for the crypto market, it’s enough to send a traditional bank manager into payment-triggered panic. So there has to be a mutual understanding and any crypto-friendly solution has to be able to scale with the movements in the market.
Even some of the biggest crypto exchanges in the world have had their banking access shut down, almost at a stroke. And it’s not always because the payment provider changes its mind – it could be the underlying payment or bank provider that runs the service. And it can have a massive impact on the crypto platform and its brand reputation.
And, as Michael attests, reputation and trust are everything: “It helps to build trust for our customers to show that we are a real platform, that we are regulated by the Bank of Spain and that we are currently planning to apply for future licenses and registrations. We also plan to work with audit firms, showing that we are financially sound, and that our technology stack is stable and so on.’
Earn money on super apps
If super apps are to work, they need to make financial sense for the provider as well. There will not be a single business model that fits all, but we believe there will be two main approaches.
The first is about adding extra features – such as debit cards. These may not be revenue drivers on their own, but they are a retention feature that attracts customers to use more revenue generating products in the application, such as investment products, currency or other features. The more people who use the app, the more opportunities there are for regular individual purchases and transaction fees that make the app sustainable.
The other main approach is around subscriptions and possibly multi-layered subscriptions, as Michael explains. “Having different levels is important. Now we have three levels. Number one is free. Number two is our middle tier, and number three is the ultimate “whale” account, with unlimited everything. We are still developing more products and benefits that we will add to these tiers to make them more attractive. So, contrary to popular belief, we believe this is a hugely exciting time for the crypto world. Yes, crypto investing is always headline-generating, but as the functionality of DeFi, CeFi and Web3 emerges, it reveals significant opportunities – and this is where the real growth potential of crypto, and its super apps, lies.’
Finally, has Modulr made Nebeus’ payment dreams come true? We asked Michael, if Modulr was a spirit, what wish we could grant. “To be honest, I will say that you have already fulfilled all our wishes. And that’s really because, when we think back to a year ago, where we are right now is exactly where we wanted to be!’
About Gavin Waddell
Gavin Waddell is director of strategic account sales and crypto specialist at Modulr, working with forward-thinking clients to bridge the gap between crypto and finance. He has specialized in this area for some time, working for ClearBank before joining Modulr. You can find out more about his thought leadership in the upcoming Modulr eBook, ‘Future Strategies’.
About module no
Modulr is the Payments-as-a-Service API platform for digital businesses that need a faster, easier and more reliable way to move money. Companies can automate payment flows, embed payments into their platforms and build completely new payment products and services themselves. Everything managed in real time, 24/7 from one API. Modulr operates the payment system for the likes of Revolut, Sage and Hodge Bank.
