The Rise Of The Super App In Central America

For platforms offering a variety of services — courting sticky relationships with their end users — the holy grail is the super app.

It’s a way to build an ecosystem, a conduit to daily interactions that run the gamut from travel to healthcare to banking. In short, a super app is one large umbrella stretching across life, an app that gives users seamless access to the data and services they need, while giving merchants additional revenue streams.

But Moises Chaves, chairman and co-founder of OMNi, which is focused on digital infrastructure in Central America and the Caribbean (CAC), told Karen Webster that firms looking to deploy super apps in new markets must think local even as they go global.

OMNi, which operates in verticals including FinTech and health mobility, takes its cue from companies like Uber, whose platform scales horizontally to span ridesharing, freight and food delivery; PayPal, which has a presence with P2P but also has expanded into gig worker pay, remittances and a commerce platform; and Grab and Gojek, which have moved well beyond ridesharing to embrace financial services.

As Chaves said of the super app: “When you have mobility, you have convenience.”

Beyond Blue Oceans

And, touching on CAC’s allure, he likened the “blue ocean” to a super app. But OMNi, he said, took shape in the wake of his own experience in Singapore, watching Grab and Gojek “kill themselves to get into a Southeast Asian market.”

He observed close up Grab’s strategy to attack Uber by becoming the second-largest player in the ride-hailing industry, while linking rewards and loyalty programs to that offering.

And although, throughout the globe, firms developing super apps may look for huge metrics — that is, a target audience — Chaves maintained that “super apps are the perfect vehicle to get into any market because you bring many solutions. You have many ways to capture users.”

So, while behemoths battled in Asia for market share, there existed and still exist opportunities to bring that model to CAC — where, according to Chaves, “no one even looked at our countries because they were such small, small markets. Here we say [about bureaucracy], ‘a small town, a huge hell.’ So maybe that was a reason that everyone was very scared to get into these markets.”

OMNi, he said, has followed an approach that “chains” services across a number of verticals that converge at different points in time. eCommerce, then, leads to delivery services, and both lead to banking (via, say, OMNi’s neo-bank) to pay for it all.

With a nod to how attractive super apps can be to enterprises, Chaves noted that “it has been easier to get the merchant on board than to get the user.” That’s because payment processing fees in Costa Rica can be as high as 4 percent to 9 percent. Often, merchants will give a discount on payments made with cash, the ultimate form of real-time transactions. With QR rails, with digital payments, that cost can be reduced significantly.

But to get acceptance within a given market, it’s important to have what Chaves likened to an “icebreaker, and for the Costa Rica market specifically, it was bikes.” The company offers rent-on-demand pedal-assisted electric bikes through its app.

“We did it the Singapore way,” he said. “We did contracts with private retailers for them to place a parking spot for bikes, which helps create a brand that helps position any other service with more confidence and trust in what we’re doing.”

Drilling down a bit, he said OMNi’s verticals across FinTech, mobility, lifestyle and health each contain a core product. In lifestyle, the core product is eCommerce; in health, the main product is medical records.

“But in health, we also have pharma delivery, so health records and pharma converge in delivery service,” he said.

Although the verticals may converge, each segment needs to be able to survive by itself, maintained Chaves.

“When we connect them, they increase their profitability,” he said. “They cannot depend on one another — I don’t want them to cannibalize each other.”

Commerce, Too

Before the pandemic, merchants were using “normal communication channels” spanning Facebook, Instagram and SMS to monetize transactions. There now exists a “formal” channel to do so — and provide a continuum of services from browsing to delivery. That’s given rise to the online marketplace, he said. Merchants pay a monthly subscription fee plus a percentage of their sales tickets, which varies according to product verticals.

But with the rise of the marketplace comes the need for business intelligence, said Chaves — analyzing the effectiveness of advertising and promotional efforts, for example.

“That’s where our solutions come in,” he said, through digital infrastructure that links merchants and consumers, that links payments to (eventual) delivery of goods.

The Banks

OMNi, as a FinTech, operates a neo-bank. Earlier this year, the company announced a linkup with Mastercard debit cards across its mobile app (and RTGS digital wallets).

As for the traditional banks in CAC, he said, “I am a threat for them. And I am glad to be a threat to them.”

He said banking culture in the region is dominated by high-interest rates and inefficiencies. With the pandemic in place, the timing has been good to bring digital-only banking to CAC. People will no longer wait for hours in line at the bank to open an account or a month to get a debit card.

With half a million downloads in the first three months, and a reach that touches 5 percent of the population, he said that OMNi’s neo-bank efforts have already topped digital banking peers’ efforts in the U.K. and the U.S.

For the rest of 2020, OMNi’s goal is to cultivate trust. The firm spent more than a year developing the basics of the super app, the first one of its kind in the world.

“If my core in FinTech is people’s money, I need them to trust the platform,” he said — and trust the other services on offer too.

“We are ready to plug and play whatever we want — whenever we want,” he said.