The rise of ‘Super Apps’ in Fintech
Of Jason FuentesVP for business development, Wildfire systems
“Superapps” aren’t just your run-of-the-mill mobile application. They satisfy a wide range of services for users and have received considerable attention in the fintech and banking industry in recent years. These apps usually include a variety of financial services, communication tools, and many other common useful features. Examples of super apps worldwide include Gojek in Indonesia and Grab in Southeast Asia, but the most famous is China’s WeChat. Not just a do-it-all communication app, WeChat is also used to universally pay for goods and services, or even hail a taxi. By offering a convenient experience that provides immediate value to the user, WeChat has successfully cemented itself as the “go-to” app for Chinese consumers—indeed, a [digital] jumps off the point to all the user’s necessities. With an estimated 58% of the Chinese population already using WeChat, the incentives to build a super app are clear for every company on the planet, including non-financial ones.
PayPal is often cited as the first non-Chinese company to achieve super app status, but many others are also working on similar projects. In the race to create the next one-of-a-kind do-it-all app, competition is getting tougher, with many of the world’s biggest companies aggressively investing in various “moonshots” – many aiming to achieve super app status. For example, Microsoft recently announced its intentions in space, and we are already aware of the pull of Apple’s convenient hardware-to-software combination, one that Mark Zuckerberg wants to see dissolved, while Meta rockets ahead of the pack hope to meet us again in a not so distant future.
Not to be overshadowed by the tech giants of Silicon Valley, Walmart, the king of retail with over 150 million unique US shoppers each month, recently took the plunge, announcing the acquisition of two fintechs on the same day. No, they haven’t acquired state-of-the-art banking infrastructure to launch another bank, rather the acquisitions help them solve a leading pain point for their customers: access to comprehensive and digital personal banking on demand.
Why did Walmart enter this space? It is important to recognize that the Walmart customer has historically been overlooked by traditional financial institutions, which have been largely focused on attracting a more affluent user. By filling this void for its customers and giving them the financial management tools they want and the shopping features they need for a more convenient shopping experience, it’s not hard to predict the app that Walmart customers are most likely to open first the next time they need something. Exposure to the Walmart brand through a super app that customers are likely to use daily? No wonder Walmart was eager to dive into fintech with their version of a super app.
How super apps are straining customer loyalty
As for the remaining banks and the multitude of utilitarian apps also vying for super app status, they need to find their own way to create more engagement with their customers. This is the ultimate prize: maximizing customer engagement to drive loyalty. Increasing time with the customer also leads to more opportunities for monetization, thereby increasing the revenue that results from capturing as much of the user’s attention and commerce as possible.
Data is another valuable asset that these companies seek to obtain through a super app. By providing users with a diverse ecosystem of features and tools, these companies can also collect a wealth of data regarding customer preferences and behavior. This valuable insight can then be used to tailor marketing and improve the overall customer experience, greatly helping to initiate an even deeper relationship with the user by delivering contextually relevant experiences that continuously add value.
But as the appetite for super apps continues to grow, building one isn’t easy. Beyond significant investment to build or assemble a technology stack capable of supporting a wide variety of services relevant to a large user base (and having the ability to scale to do so), a clear monetization strategy is also required to succeed. Enabling more services, beyond the core business that originally attracted the user, is a common strategy for a super app to help them capture more of the user’s time and attention. Other important considerations include personal utility, foolproof security, and maximizing convenience. Most importantly, the entire service package needs to be streamlined and delivered to the user through a reliable experience that can stand out from the competition.
The trend towards super apps is likely to continue as companies look for ways to increase customer engagement and capture valuable consumer data. While building a super app is a significant undertaking, the potential rewards in terms of customer loyalty and new revenue streams make it an attractive option for many financial institutions, technology companies, retailers and more. Any company considering building a super app needs to determine whether it’s worth the time, effort, and expense needed to create a centralized, branded hub of valuable tools that simply become part of consumers’ lives and everyday routines.
About the author
Jason Fuentes builds strategic revenue-enhancing partnerships between Wildfire and financial institutions and fintechs, helping them incorporate value-added customer loyalty features powered by Wildfire’s white-label cashback platform. With extensive experience building productive partnerships at fintech startups as well as e-commerce and media companies, Jason brings a unique blend of expertise across sales, partnerships, marketing, operations and product management across multiple industries that help him facilitate the delivery of positive results for Wildfire’s partners and stay on top of payment and fintech trends.
