Your digital wallet will be your SUPER-APP.
Don't expect Visa to tell you this.
Super-apps are coming to the West, but not in the way you or Visa think!
The global super-app market is huge, estimated to be worth US$60 billion in 2022, and is forecasted to exceed US$426B by 2030.
If you’re in the EU or US, you’ll get a super-app through your digital wallet!
No WeChat in the West
The card duopoly with the assistance of regulators, controls payments and regulators will do nothing to promote alternatives.
“X” and PayPal are trying to challenge the duopoly, but success is doubtful.
PayPal has been subpoenaed by the SEC over its new stablecoin.
Does anyone trust “X” even if it is licensed to transmit money in 50 states?
Digital wallets like those for the digital euro or even the US’s FedNow will become superapps in the not-so-distant future.
How? They will use mini-programs, as do WeChat and Alipay, to bring app functionality directly to your wallet.
Paytechs will build super-app functionality into your digital euro of FedNow wallet, and your wallet will have all of the super functionality you need.
Minprograms are what made WeChat and Alipay “super”. They will do the same for your digital wallet!
Visa doesn’t want to imagine this future because it takes payments away from cards!
Trends driving Super-apps:
Younger generations comprise almost half of the global population (in 2021, the median age was just 30).
Over recent years, there has been a progressive transition of brick-and-mortar services to the digital realm.
For everyday events such as grocery shopping, ride-hailing, and making payments, consumers have often needed to download a dedicated app.
Across the digital realm, we see examples of companies looking to extend their existing franchise by investing in services and solutions that go beyond their core offering.
In the digital space, network effects can be a strong force. For example, people are incentivized to join the platforms their peers use.
Breakdown of super-app functionality with global examples.
Payments are what made Alipay and WeChat Pay “super.” In the advanced West, it is unlikely that “X,” Amazon or PayPal will break with the card duopoly to make payments efficient. Only a digital wallet tied to fast payments or CBDC can break this cycle in the West.
I am frequently asked when the advanced economies of the West will get a super-app. My answer remains the same:
You won't get a super-app until regulators allow big tech to license as payment providers.
Regulators in the US and EU have, so far, been unwilling to break Visa and Mastercard’s duopoly on payments, and I don’t expect this to change.
For an example of how difficult it will be to break the duopoly, look at how PayPal has been subpoenaed for its new stablecoin. Its dreams of escaping the duopoly were short-lived.
Your super app is coming!
You will get a super app. However, it just won’t look like WeChat or Mercado Libre.
Your super app will be your digital wallet. If you live in the EU, you’ll get a digital euro, breaking the duopoly’s hold over payment rails.
While not as powerful as a CBDC, the US’s FedNow will also challenge the card companies and allow resourceful paytechs to build on your digital wallet.
Whether a CBDC or FedNow wallet, both will eventually see the use of miniprograms on the digital wallet. I expect paytech companies to make this a reality sooner rather than later.
WeChat invented mini-programs, allowing full-featured sub-apps to exist on the wallet. They are built to common standards, allow for easy connection to the payment system, and provide services without leaving the wallet, just like on WeChat.
So, if you need Uber, download the miniprogram on your wallet, and away you go! Mini-programs will work with your daily services and bring super-app capabilities to your digital wallet.
Why doesn’t Visa mention this? Easy, they are half of the duopoly and anything that calls into question its continued dominance in payment is forbidden.
My personal mini-programs on WeChat.
Your digital wallet will have these embedded to make it truly super.