Since Elon Musk’s “be careful what you wish for” takeover of Twitter, speculation about America’s first homegrown “super app” has skyrocketed.
In October, Musk tweetedTo: “Buying Twitter is an acceleration in creating X, the everything app.” According to Cathie Wood, founder of Ark Invest, Musk is “thinking about a super app like WeChat Pay”. Keep in mind that Musk founded X.Com and merged it with Confinity to create PayPal.
For context, China’s WeChat launched as a messaging service in 2011 and has since become a combination of Meta, Apple Pay, Venmo, Amazon, Uber, Robinhood, Rocket Mortgage, Kayak and Healthcare.gov – as well as more than 3.5 million partners “mini programs” that work in the app. PayPal and Walmart have been teasing their own versions of financial super apps since September 2021, but with much less fanfare.
Twitter, PayPal and Walmart could compete to monetize the financial lives of millions of people. That raises several questions: Why is now the time for super apps in the West? How should we judge progress towards a super app? How are Twitter, PayPal and Walmart chasing this idea? Which one has the best chances of winning, or is there actually room for several leaders?
Why now?
While super apps are popular in Asia, Latin America, and Africa, they haven’t caught on in the US and Europe. If Twitter, PayPal and Walmart are going to change that, we have to ask why.
The measure of a fintech super app is how much financial activity it can concentrate in one ecosystem.
“Super apps gained a foothold in Asia because Asian consumers had underpowered smartphones that were not conducive to managing 40 to 50 separate apps,” according to Ron Shevlin, chief research officer at Cornerstone Advisors. In the US and Europe, smartphones didn’t have the power or memory challenges typical of the hardware in less developed regions, so super apps were never a necessity.
In addition, if Axios arguesdata privacy fears, strict banking regulations, and Apple and Alphabet’s scrutiny of payments in their mobile operating systems have deterred would-be super apps.
A super app doesn’t solve any obvious problem for the Western consumer, apart from providing convenience and security (both debatable). That said, it could be argued that such an app could provide finance, banking, and credit building opportunities to those with and without a bank, who may be excluded from mainstream financial services or fear it.
So why now?
Twitter has lost the digital advertising field to Alphabet, Meta and Amazon. PayPal is too reliant on payment processing, which is becoming an increasingly crowded, competitive space. Walmart, always one step behind Amazon in digital, is too late to try something its Seattle rival hasn’t tried yet.
Super apps represent a fresh and new pasture for these giants.
