Super apps, buy now, pay later (BNPL), and the grocery category were in the news in recent days. Matt Naish, head of product strategy at FISPAN, joined PYMNTS to discuss the hot topics in This Week in Payments.
The week saw several announcements of “super apps” — a term that’s been thrown around a lot lately but isn’t well defined.
Naish noted that a Google search for the phrase will find any number of definitions. He added that he believes the key features of one are an integration and a contextualized experience.
Read more: How US Consumers Define the Super App
Stores of Stores
Naish used the analogy of stores. A Main Street might have many different stores that operate independently and take different payments. A “super app” of stores, on the other hand, would be something like Ikea, which offers an end-to-end experience that includes shopping, delivery and assembly.
“There is a lot of clutter in our online and offline worlds, and this is the consolidation and trying to simplify,” Naish said. “Seventy percent of us want simplification of our lives probably in general, but here specifically our digital lives.”
This week saw the Brazilian super app Inter announce Tuesday (Jan. 25) that it had received authorizations in both the U.S. and Brazil to purchase the U.S. FinTech Usend.
BNPL network Affirm said Wednesday (Jan. 26) that it was adding an Affirm SuperApp that puts all of its shopping, payments and financial services in one destination.
Read also: Affirm Turns Its App Into a Super App
Walmart too made some moves this week in a bid to build a super app.
A New Battleground
The super app competition has become a new battleground, Naish said.
“As [Affirm progresses] out from the buy now, pay later market and are really wanting to control a little bit more of their own destiny, control that end-to-end experience and maybe sort of diversify away a little bit,” Naish said.
Buy now, pay later remained in this news this week too with Klarna CEO Sebastian Siemiatkowski saying increased competition in the sector has retailers pushing for lower fees.
In addition, a PYMNTS survey released this week reported that 70% of current BNPL users say they would be interested in using BNPL plans from their banks if such offerings were available.
Naish said BNPL would be a perfect component of a great banking super app because people trust their banks and would love to involve their banks in any of their financial matters.
“Where banks need to meet the market is in offering those — again, I keep saying the word ‘experiences’ today, but I think that’s the poignant topic that intertwines between all this is, meet people where they are,” Naish said.
Despite all the activity in the BNPL space, there’s also a lot of greenfield opportunity because this option accounted for only 3% of total payments in 2021, Naish said. At the same time, downward pressure on fees is leading some BNPL players to look to expand into other areas.
“I think you’ll probably see an acceleration of the acquisitions, the partnerships, etc.,” Naish said.
Grocery Price Wars
The grocery category was in the news this week too, with reports that grocers’ price increases could send shoppers running right into the arms of competitors.
A PYMNTS report released during the week found that price is the single most influential factor in consumers’ decisions about which grocery store to purchase from, with the second-most-important factor being proximity.
Grocers’ eCommerce businesses too are a key to success, PYMNTS reported.
“It’s still about convenience, but it’s not about the convenience of getting in my car and driving to a grocery store, it’s about the online convenience,” Naish said.
Referring to the conversation about super apps, Naish said there’s an opportunity for Walmart and other dominant players to monetize customer data.
“As we progress more and more into an open-banking, open-data market, the wins are really given to the entities that figure out how to unlock the power in the existing data they have and then partnering and exposing that data to complete those end-to-end experiences,” Naish said.