Much of Chinese society has come to rely on so-called super apps like WeChat to multitask, from making a medical appointment to hailing a taxi to getting a loan, all on one platform.
But these department stores didn’t take off in the United States. Now, it may finally be time – and the top competitors for the super apps come from the fintech world, especially those platforms dedicated to cryptocurrency.
Cryptocurrency is rapidly growing in popularity amid soaring stock prices, record low interest rates, and fear of inflation on the horizon, and may gain more legitimacy if the US government decides to fully regulate it, a topic that Congress is currently looking to explore.
Dedicated crypto platforms like Coinbase or even Paypal, Venmo and Stripe, which recently added capabilities to use crypto for payments, could develop into US versions of the super apps, assuming crypto issuers can work with regulators to find a compromise between consumer protection and consumer protection. Creating new financial and investment opportunities. If consumers see encryption as safe, legitimate – and easy to use – it could become the basis for super applications.
The bottom line is that people think about financing not just when they go to the bank — if they have access to a bank — but when they’re shopping, vacationing, or paying for a medical visit.
Expanding these encryption and payment applications to integrate with other applications and services will make many diverse tasks more convenient. The bottom line is that people think about financing not just when they go to the bank – if they have access to a bank – but when they’re shopping, vacationing or paying for a medical visit, and these apps will help deliver the financial services they need in a personal way.
Incorporating crypto-payments into other tasks would also go a long way to democratizing the world of finance, giving underserved communities and those without credit history and those struggling to open credit cards or get loans, more access to financial services.
The emergence of the super application
WeChat started as a messaging app in China in 2011, but by 2013, it also served as a payment platform and soon offered many other services, such as shopping, food delivery, and taxis.
It now offers over a million different services, primarily through widgets that companies develop to work within WeChat. AliPay, which also has over a billion users, is similar. These two apps have been recorded over the past decade in transforming China from a cash-only economy to one that relies heavily on digital payments, skipping the intermediate stage of debit and credit cards.
This concept has also become popular in Indonesia and elsewhere in the region. The fact that it involves financial services, including payment options, is fundamental, and the common thread that runs through many of the super application services.
But while the use of apps has spread in the US and Europe; Big Tech players like Apple, Facebook and Google have added payment services; And many payment apps like Venmo and Square are becoming more and more popular, and the super apps are yet to come out.
This is in part due to data privacy regulations; Privacy laws in the US, and especially in Europe, restrict data shared between apps, making it difficult to create an ecosystem where widgets can automatically integrate into super apps like Alipay.
This also stems from the US having a well-developed internet system, with popular social media sites, such as Facebook, and payment sites, such as PayPal, existing before the advent of smartphones, resulting in each of these platforms launching separate apps, instead. From a single application that offers multiple services. Compare that to China, where most of the internet was about mobile phones first, and only emerged after the advent of smartphones. The US market has long been used to separate platforms into separate tasks.
But many analysts point out that apps and tech companies are adding more services — such as adding shopping to TikTok, Snapchat’s integration of game widgets or Apple’s entry into the payment space — and say the super apps will eventually appear in the US, or at least apps The bigger she can do the more things. Adding more services to an app, and finding a way to keep users on it, is also a way to get around privacy regulations that prevent an app from knowing what its users are doing on another.
Apps are clearly on track to become larger and more comprehensive, although it is unlikely that the US will end up with only one or two dominant apps, as is evident in Asian markets.
Rise of DeFi
Meanwhile, cryptocurrency has evolved along with payment and super apps over the past decade. What started as a single product, Bitcoin, has evolved into a complete peer-to-peer financial system, known as DeFi, with multiple currencies, including Ethereum and Dogecoin, allowing users to invest, trade, spend and lend money.
But despite its rising popularity, especially during the economic uncertainty posed by the COVID pandemic, and more traditional financial institutions starting to offer some services related to cryptocurrency, it remains outside the mainstream financial system and sector, which many experts say poses risks. High . Cryptocurrency issuers have long resisted regulation, as it would interfere with their goal of having a decentralized financial product.
But now things are starting to change, with some crypto platforms expressing interest in the following regulations.
For example, Coinbase dropped a plan to offer an interest-earning product that would have allowed users to earn interest on coins loaned to others, after the US Securities and Exchange Commission failed to provide guidance on it and threatened to sue Coinbase if it were released. In fact, cryptocurrency issuers are aware that some regulations will give their product more legitimacy and allow more people to use it for more purposes. This comes with new crypto products hitting the market recently, including stablecoin, which tracks the value of traditional coins.
Regulating cryptocurrency, an idea that SEC President Gary Gensler said he supports, along with some in Congress and some in the crypto industry, could already be on the horizon.
Using Cryptocurrency to Fuel America’s First Super App
If cryptocurrency issuers work with government officials to put in place regulations that protect consumers without limiting innovation, crypto is a good bet for what ultimately spurs US super apps.
Think about what would happen if Coinbase worked with the Securities and Exchange Commission (SEC) and complied with smart regulations that would validate Coinbase as an approved and viable financial intermediary that users can rely on in cryptocurrency, while embracing each of its new attractive-return financial products In addition to being able to use it for daily spending. Regulations are more likely to stabilize currencies, turning them into something practical to shop for, rather than simply holding potential value. These regulations will also eliminate some of the steps that add friction to existing user experiences when it comes to using crypto in daily life, such as long transaction times, high transaction fees and large fluctuations in its value.
The regulatory framework will open up a huge demand for cryptocurrencies, and there will suddenly be many companies – from restaurants to retail – that might want a way to process crypto payments, incentivize them to integrate into existing crypto payment apps and cause them to evolve into super apps. . More people will also make cryptocurrency deposits on these apps, instead of using traditional currencies in their banks. This would disrupt the economy and the entire financial system.
Banks have always produced products that the public believes Wants While the world of crypto and DeFi clearly provide products and services to people need to, And millions already use it, despite its uncertain regulatory and legal status.
Just as ubiquitous and rapidly integrated digital payments have emerged in China to fill a need — a cash alternative in a market lacking in credit cards — crypto-based super apps will meet the needs of consumers and businesses looking for a secure and efficient way to use cryptocurrencies in place of or in addition to traditional payment methods. .
If crypto remains an unregulated gray area, and its platforms remain isolated from the rest of economic and everyday life, rather than evolving into super applications, the United States will miss the opportunity to build a new and innovative mobile and digital financial ecosystem first. .