Miscellaneous

Super Wallets Take Over

Mobile wallets today are a way of organizing existing financial accounts. The standard mobile wallet works as a safe, virtual storage for tokenized credit cards, debit cards, and bank account information, but as the payments landscape evolves, a growing number of digital wallets are moving beyond the single-function app approach, adding to financial offerings that go beyond facilitating payments — such as loans, insurance, investing, and digital banking. Distinctive features can help players differentiate themselves in the already crowded mobile wallet market and avoid becoming just another payment app on a user’s phone. The result increasingly looks like what is called a financial super app, or “super wallet”: a connected ecosystem where users can manage payments, savings, investments, crypto, budgets, loans, insurance, and more, all in one place. Asia has been leading this trend, with a number of digital wallets here evolving into successful super apps — diversifying beyond payments into food delivery, taxi-hailing, restaurant, and hotel booking, and even gaming.

The most well-known examples include China’s hugely popular AliPay and WeChat apps, which both started out as digital wallets and later leveraged their vast payments infrastructure to add services. Today, both apps can be used for a broad range of everyday functions, from buying groceries and clothing to purchasing insurance and stocks. Outside Asia, a number of European fintech companies are following a similar strategy. Paris-based Lydia started out in the digital wallet category as a P2P payments’ platform, then later introduced debit cards, IBANs, and personal loans, as well as stock and crypto trading. The company raised a $100m Series C round in December, officially reaching unicorn status with a $1bn valuation. Meanwhile, UK-based competitor Revolut (a self-described “global financial super app”) offers a similar range of financial products and services in 20+ countries across the world.

The company launched its super app in the US in March 2020 and applied for an official bank charter a year later.  In the US, several fintech companies are testing the super app waters. These moves signal that there could soon be stiff competition here, and for good reason: whoever secures the go-to super app status and gains widespread customer trust and adoption will likely become one of the most valuable companies in the US.  One well-known example is PayPal, which launched its own version of a financial super app in the US in 2021, taking a deliberate step into the territory of other giants like WeChat and AliPay. At present, there is no clear leader in the US market, existing financial services players now have their eyes set on becoming the go-to mobile wallet app for all things finance and more. The future of the wallet is largely being shaped by fintech players like SoFi, Venmo, MoneyLion, Block, M1 Finance, and Revolut, which offer easy-to-use, mobile-friendly platforms.