In a digital-first world, a super-app ecosystem drives value for commerce while payments close the loop. The pandemic has changed many aspects of our lives, including our daily routines and how we compensate for the services we receive. As "one-stop-shops," super apps essentially accommodate these changes by allowing users to order food, book hotel rooms and flights, find entertainment such as books, games and music, while also managing their health, all through a single application.
A third of respondents in a June 2019 survey by PYMNTS showed a strong interest in a super-app experience, while 54,2 percent said, "sounds interesting, tell me more." Of the third of consumers who said, "sign me up," 45 percent indicated that they preferred Google, while 29 percent trusted Amazon, 27 percent Apple and 22 percent PayPal to deliver that experience. Facebook, Samsung Pay and Walmart were all down on the list.
As the trend shifts, super apps are expanding to become the ultimate instrument in everybody's wallets. This is what happened in China.
Super apps for payment
The pandemic has certainly put Chinese super apps such as Alipay and WeChat in the spotlight. The country was one of the first places where digital payments and loans on smartphones transformed finance. Alipay has engaged in e-commerce and payment services to allow consumers to pay for any type of service and manage their finances, such as investments, savings and more. Besides Alipay, WeChat is also known as an "app for everything." Having started off as a messaging app, this super app has extended its platform to include broader media, communication services and payments. Merchants, from upscale shopping malls to small food stands in China, display QR codes for customers to scan and pay with Alipay or WeChat. Digital payment is indeed a promising feature to be embedded into a super app for a better user experience.
In a survey by payment solution firm Blackhawk, 82 percent of respondents said digital wallets have made the shopping experience much easier. Helena Mao, vice president of global product strategy for payments at Blackhawk Network, also revealed an increasing frequency at which consumers use retail apps. She said about 61 percent of US consumers now use retailers' apps for purchases compared with 21 percent before the pandemic.
In November, Alphabet Inc. revealed its long-anticipated expansion of Google Pay as a super app in the US. The tech giant is collaborating with banks and retailers to offer a new mobile-first bank account integrated into Google Pay. Google will start offering these bank accounts, known as Plex Accounts, from next year. This will enable users to track spending behaviour over time, thanks to the addition of a banking layer with products created by banks and credit unions for interested Google Pay users. Google Pay can offer consumers banking services with Plex, and consumers are not required to trust Google as their bank. Furthermore, participating banks can also create new banking services with better visibility into transaction and payment flows. The innovation will benefit both consumers and businesses. Integrated merchants will have further motivation to present more offerings and promotions tailored to the opt-in preferences of Google Pay users. This will reduce customer acquisition costs and boost the chances for more sales.
Merchants that are part of Google's shopping platform will enjoy better access to new customers who opt into certain preferences and stand a better chance at becoming part of a larger, commerce-first ecosystem. In the past, iPhone users may not have considered the Google Pay app as it was outside the Apple ecosystem. But this could change with its status as a commerce super app. It might be too bold to assume Google Pay can take off as a super app, but it certainly sets the bar for competitors such as Apple Pay.
What will it take to build a payment super app?
The arrival of super apps has signalled the start of a new era in the payment landscape as more mobile payment apps continue to emerge with much lower costs. But as the world becomes ever more connected, demand is increasing in the untapped markets of developing countries.
A successful payment super app must be able to address multidimensional challenges in every corridor of both business and life to gain higher consumer adoption. It requires a seamless business ecosystem to bring together all different providers a customer needs to transact with for every possible service and activity. "This means that when it comes to building a successful payment super app, understanding the needs of merchants, banks and other businesses is just as important as understanding the consumer," Scott Lane, business development director at MobiCash, wrote in Finextra. "Only those with a strong track record working alongside a broad range of businesses and with a proven knowledge of payments are likely to succeed," he wrote.