Fintech Futures: The Superapp – Some Dreams Never Die

“Reach into your pocket

Cast a dream into the sky

One dream will always fly

Some dreams live forever” 

– M. Newbury

Aaah, the Superapp: a single portal to a wide range of virtual products and services, or otherwise many apps, integrated into a single umbrella app. In this “Fintech Feature,” we explore one Superapp: WeChat. 

There are three myths in the Fintech space that keep on coming back, just like our Scottish friend Nessie: 

Myth 1: Google, Apple, Facebook, and Amazon (GAFA) will eventually end the financial services industry as we know it

Myth 2: XY app or AB service (insert the latest hype) means the end days of big banks are rapidly approaching

Myth 3: The Superapp will rule it all and take over the world. 

As to the two first myths: Big Banks are still pretty big, and GAFA is making small strides but is more evolutionary in its transformation than revolutionary. And, yes, there are wonderful new apps and services, but they only interfere with the big bank business on the margins.

With more than 1 billion monthly users, all eyes are focused on WeChat. Easily the most important app in China, people can use the app for a variety of tasks such as ordering transportation, sending money, making payments, video conferencing, playing games, and sharing media. While those who don’t have access to WeChat scroll through screens to find Venmo, Zoom, Uber, Apple Arcade, and Instagram. A Superapp such as WeChat makes so much sense, so why did it gain so much traction in Asia and not in the US and Europe?

• The majority of emerging Asian countries completely missed the desktop Internet revolution. While the US and Europe got used to computing through desktops, more than 1.5 billion people were not connected. By leapfrogging desktop to mobile-first, mobile computing immediately became the norm. 
• The Chinese government severely lacked digital capabilities and worked closely with Tencent to build public service apps on WeChat. This benefited the company and the government because it led to a viral growth loop.
• Until the mobile revolution, the vast majority of people in emerging Asian countries were unbanked. Superapps allowed the unbanked to access and invest their assets for the first time in their life. Is there a better path to build brand loyalty?

A Superapp like WeChat took advantage of a unique situation in time. This opportunity might arise for a Superapp in the US/Europe at one point, but it’s not going to be easy because of three reasons:

1. Trust
2. Trust
3. Trust

This lack of trust is not unique to GAFA. Facebook continues eroding trust with security breaches, scandals, and unethical behavior. Google and Apple are aligned in not supporting Superapps by forcing app developers to pay a toll in the form of ads or charging a 30% fee to any app in their store. Amazon has the trust of an eCommerce firm, but they don’t have a good app now and have never shown interest in any financial services; instead, they’re exploring other big fish, such as healthcare. 

Add to that a much stricter regulatory structure and extremely individualized cultures compared to Asia, and the likelihood of a Superapp seems low. However, we might not see THE Superapp in the US/Europe, it might just be a Category Superapp comparable to the expansion of Uber from a ride-sharing app to a food delivery app with plans to add planes and trains to their offerings. It remains to be seen if people will connect with these additional options or continue to use Uber in limited ways. 

Some dreams live forever

Some dreams live forever

Some dreams live forever

Some dreams never die

– M. Newbury