Are payments the most important feature of super apps?

What is a super app? If the term conjures up ideas of an all-powerful smartphone application, then you’re close to the truth. 

Supposedly coined by Blackberry founder Mike Lazardis, super apps are multipurpose platforms that allow users to satisfy a range of needs all in one place. These unified apps have been dominant in Asian economies for a while, but have yet to find much traction in the US and other Western markets, where a wider array of more dedicated platforms hold sway. 

Nevertheless, in the world of finance, the value of super apps is becoming increasingly clear. The borders between different financial functions can be blurry, but the conventional mobile approach treats them as fundamentally distinct at the expense of convenience and user experience. Super apps offer a solution and payments are at their core. 

In this article, we explain why payments are central to super apps, explore the benefits of this more integrated approach to financial services, and look at the near future of super apps in the global market. 

What is a financial super app?

A financial super app is a mobile application that offers a wide range of financial services all in one place. Rather than requiring users to download multiple apps for different financial functions - such as banking, investing, payments, insurance, and financial planning - a financial super app unites a number of ‘miniapps’ on a single platform.

Alipay is one notable example of a financial super app. This Chinese third-party mobile platform offers a range of services to businesses and consumers, including payments, loans, credit scoring, and more.

Characteristics of a super app

While super apps can theoretically offer a near infinite combination of different functions and features, they do have some key characteristics that make them distinct from any old mobile application. 

We’ve already mentioned the benefits of incorporating multiple financial functions in one platform, but super apps are also a testament to the value of combining even seemingly unrelated services like messaging and payments. 

Those key characteristics are:

• Range of services - central to the definition of a super app is that it has to act as a one stop shop for multiple services, such as social media, ecommerce, ride-hailing, or any other function, but that each of those services could operate as its own single purpose app
• Focus on user experience - another key idea behind super apps is that they offer users a seamless experience, meaning they don’t need to download and manage multiple apps to meet different needs 
• Evolution from a single purpose - most super apps start life as a single service that then evolves to encompass multiple functions as the app creators see that there are rewards to be had in meeting numerous, sometimes integrated, needs
• Unifying third parties - super apps often perform as the unified frontend for an entire ecosystem of multiple third party businesses, as well as internal developers, by leveraging Open banking frameworks and APIs
• Deeper engagement - another characteristic of super apps is that, as users don’t need to switch apps, they have longer sessions on a single platform, resulting in much deeper engagement and stickiness 
• Rich data - a byproduct of this engagement is the generation of a wealth of rich, integrated data that can give developers much deeper insight into user behavior and preferences. This data can inform the development of highly personalized experiences, further increasing engagement and retention
• Scalability - as they’re often based on Open APIs, super apps are highly scalable, with a modular construction that allows new functions to be integrated without affecting existing services 
• Security - hosting multiple, interconnected miniapps that each require a lot of sensitive customer information to function necessitates robust security. As such, super apps generally employ advanced security measures like biometric authentication and end-to-end encryption   
• Network effects - the network effect (the concept of a the value of something increasing as more people use it) is a key characteristic of super apps, where this effect is amplified for both the service providers and their consumers

Why payments are central to super apps

Whatever the functions included in a super app, it’s no surprise that, in our highly commercial world, payments is a common theme, and with good reason.

User Convenience

A single payments solution allows users to make transactions across multiple services without ever leaving the app and only requires them to enter their payment details once. This offers unparalleled user convenience, because the customer can enjoy a consistent and secure payments experience rather than having to log into different platforms and complete multiple authentications every time they want to make a purchase. 

Economic Value

By leveraging the revenue models of many different third-party businesses, and providing a platform for their customer transactions, super apps gain access to an exciting new world of possibilities for monetization. For example, they can charge commission or transaction fees to their miniapp partners, or offer a subscription service to drive repeat revenue, allowing third-party businesses to access improved functionality or data visibility for a monthly fee. Advertising revenue is another possibility, with partner businesses paying to advertise their services using in-app space across the entire super app platform. 

Increase in transaction volume

This convenience and the ease of making payments translates into an increased chance of conversions for the various miniapps within the integrated payments ecosystem. There’s a self-perpetuating quality to this whereby the increase in transaction volume accrues to the benefit of all the third parties involved.

Enhanced User Retention

This streamlined experience offered by super apps creates a high degree of stickiness that results in much greater user retention. Businesses can take advantage of this engagement by developing highly effective loyalty and reward programs that, in turn, generate ever more stickiness. 

Benefits of integrating payments in super apps

Here are the key benefits of integrating payments within a super app. 

Streamlined User Experience

Like having an entire shopping mall in the palm of your hand, super apps act as a single digital destination for shopping, services and payments, many combining between 10 and 15 different services on a single platform. This in-app experience is completely streamlined, maximizing convenience and user experience and, unlike the currently favored multiple-app approach, offering consistency in use of personal data, means of payment, and loyalty and rewards. 

Increased Trust and Security

It can take an age to build trust and a moment to break it. As we mentioned above, super apps tend to have very robust security measures built in to protect customer data and to keep transactions safe from fraudsters. As these payment security measures are shared by every miniapp on the platform, they can piggyback on the trust that the super app has already built among its user base. There’s a low risk that customers will be put off by the aspects of online transactions that usually damage trust, such as unfamiliar or inconsistent payment experiences, or a lack of valid security signals. 

Data Insights

Super apps share payment data across services and with third-party developers. This means that payment data collected by one service can be used to the benefit of the customer by another, whether that’s to personalize an offer or approve a transaction. While existing super apps aren’t particularly transparent about the collection and use of customer data, legislation like the EU’s GDPR regulations will require Western super apps to be much more open and gain customer permissions over data use, which builds a more trustworthy and valuable bond between businesses and consumers. 

Expansion Opportunities

Given the integrated nature of their payments system, there’s great potential for super apps to create meaningful partnerships with third-party businesses instead of treating them like rivals. This makes it easy for a super app to expand its offering by partnering with, or acquiring, businesses that already specialize in key aspects of payments, rather than having to waste resources on developing competing technologies. 

How super apps are changing mobile marketing

The potential for mobile marketing has been transformed by super apps in a number of key areas, including:

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• Data - data is at the core of effective marketing, and the possibility for super apps to generate vast amounts of user information from across multiple services makes them the ideal platforms for highly targeted marketing campaigns 
• Collaborations and cross-promotion - super apps unite businesses from within and across different sectors, giving them easy access to new markets and creating opportunities for collaboration like encouraging customers to take advantage of complimentary services on the same platform
• Lower barriers to entry - startups no longer need to invest heaps of resources in promoting their services to unfamiliar consumers. By entering the market through a super app they can take advantage of an existing and highly engaged customer base

The future of financial super apps

A relatively safe bet for the future of financial super apps is that they’ll finally make the jump to Western markets. According to a recent report from Deloitte, super apps are going to start properly emerging in the West in 2025, with a number of US firms already adopting super app-like tendencies - think of Snapchat’s mini-programs of PayPal’s integration with Venmo. Grand View Research claims that the size of the global super apps market is expected to reach $426.01 billion by 2030, expanding at a CAGR of 27.8%, in part thanks to the growing adoption of digital payments and online shopping that was fuelled by the pandemic. 

For the big tech players in the West’s digital space there are very few barriers to entry. They already have the technologies, customer bases, and resources necessary to start building super app experiences by investing in development and acquisition. However, with so many established players already succeeding in many sectors, Western markets are more likely to see a number of industry-specific super apps as opposed to the handful of extremely dominant super apps in Asia that span a range of sectors. 

If one thing’s certain, it’s that early movers stand to make big gains in this exciting new digital arena. 

Checkout.com and super apps

There’s still time to get the jump on rivals in the Western super apps space, and Checkout.com is here to help. 

As a payments service provider, we’ve already put everything in one place for you. With our flexible and modular solution, easy integration via hosted payments solutions, and support for globally ambitious businesses, you can create and scale your app with ease.  

Speak to an expert about why Checkout.com is the perfect payments partner for your app.