Speculation about America's first domestic "super app" has soared since Musk's acquisition of the micro-messaging service.
In October, Musk said that buying the micro-messaging service would help create X, the Everything app. The founder of Ark Invest says that Musk is thinking about a new app. Musk created X.Com and merged it with Confinity to createPayPal.
More than 3.5 million partner programs operate inside of China's WeChat, which launched as a messaging service in 2011. Walmart and PayPal have been teasing their own versions of financial super apps for a long time.
The financial lives of millions of people could be at risk of being monetized by social media companies. There are a number of questions that need to be answered about the moment for super apps in the West. How should we know if we are on the right track? How are these companies trying to get this idea? Is there room for several leaders or which one has the better odds?
Super apps are popular in Asia, Latin America and Africa, but not in the U.S. We need to ask why these companies are going to change that.
The benchmark of a fintech super app is how much financial activity it can concentrate into one ecosystem.
According to Ron Shevlin, chief research officer at Cornerstone Advisors, Asian consumers owned under-powered phones that weren't good enough to manage 40 to 50 separate apps. Super apps were not needed in the U.S. and Europe due to the lack of power or memory challenges typical of the hardware in less developed regions.
Data privacy fears, strict banking regulations, and Apple andAlphabet's control over payments in their mobile operating systems have deterred would be super apps.
An obvious problem for the Western consumer isn't solved by a super app. You could argue that such an app could bring finance, banking and credit-building opportunities to the underbanked or unbanked, who may be either excluded from mainstream financial services or afraid of them.
Why right now?
Digital advertising has been taken over by Amazon. PayPal is dependent on payment processing which is a crowded space. Walmart has been behind Amazon in digital for a long time, so it is time to try something new.
These giants have a new place to call home with the emergence of super apps.
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