Banking Circle Group is on the ground at Money20/20 USA in Las Vegas for FinTech’s biggest conversations – here are the highlights from Tuesday.

Payments will drive future ‘super apps’

Multi-solution platforms are increasingly on the rise in FinTech – read our report on the rebundling of financial services here – and we are now seeing tech giants look to bring financial innovation in-house as they race to build the next ‘super app’.

In the U.S. though, there is yet to be a super app with the same level of penetration as the likes of WeChat in Asia. During a session at Money20/20 USA on Tuesday, panellists discussed the role of payments in the super apps of the future and whether the U.S. could see a dominant player emerge.

According to Larry Lee, Global Head of Financial Networks at Rapyd, a true super app requires daily interaction with its users and has a foundation in payments.

“[One of the things] that stitches together a super app is payments infrastructure, because it’s all about commerce,” Larry explained. “With commerce embedded in there, payments has to be an important part of it.”

Paula Arregui, COO Mercado Pago at Mercado Libre, also emphasised the importance of payments as a foundation of tomorrow’s winning super apps.

“Payments bring that retention and frequency of usage of users on a daily basis, so you can then start creating a huge mass of users, and other services can be built on top of the data and information that you have,” she said.

But Ron Shevlin, Chief Research Officer at Cornerstone Advisors, argued that a super app must be more than just a financial services construct: “It has to incorporate a lot of other types of things like messaging and commerce, and other services such as transportation, telco, and healthcare.”

He went on to say that for a dominant super app to emerge, it is “as much about providing the B2B services as it is the B2C.”

Both Ron and Larry pointed to the technological circumstances which have helped fuel the rise of super apps in Asia: smartphones with lower-operating systems are more prevalent in the region, which has made using fewer apps a necessity for users. Those circumstances are not reflected in the U.S. market, where users want the choice of multiple options, which may make it more difficult for a winning super app to emerge.

Regulatory conditions today mean that a financial super app is more viable than in the past, Larry went on to say.

“E-money regulation has matured over the last 20 years, and that’s something that is critical. In the past if you wanted to launch an app around the world, you weren’t able to because you were hitting barriers,” he said. “Apps can now build right into an operating system that didn’t exist before, so regulation has been beneficial in creating super apps with the new services that are there now.”

Growth of APMs in commerce

In a session on embedded payments and commerce, a panel discussed the importance of providing a seamless digital payments experience and the growing need for businesses to offer alternative payment methods (APMs).

Bobby Wright, Director of eCommerce Payments at Zillow, said that it is critical even for small business owners to be considering APMs, given the expectation from consumers today for a superior digital experience.

“The biggest one that has reached critical mass is digital wallets…You now have huge adoption across different wallet spaces in a short amount of time, and that is critical to the buying experience,” he said.

But while APMs are increasing in adoption, certain payment methods may not be as suitable for one industry as they are for another: “It’s not one solution that fits all,” said Samir Zabaneh, CEO at TouchBistro. “Ultimately the frictionless exit for the consumer is really important, and that’s where big innovation has to happen.”

Bobby highlighted the strides made during the COVID-19 pandemic, explaining that it is necessity that really drives adoption.

“When our physical world came to a halt a couple of years ago, that allowed our digital world to really time travel – not only from what the payments industry can provide from a functionality perspective, but, more importantly, it also drove customer adoption at a quicker rate than we would have seen if everything continued BAU,” he said. “It’s easy for the smartest people in the room to continue to innovate, but that doesn’t necessarily mean it’s going to map to customer adoption.”

Banking Circle Group companies offer a range of payments services, including global payments and banking services from Banking Circle, business payments from B4B Payments, and embedded finance services from YouLend.