Fintech companies are betting on the strategy of super apps to drive
Consumers are spending more and more time on their smartphones. From socializing to buying groceries, entertainment and shopping, everything is done via mobile phones. To build brand loyalty and loyalty among consumers, companies are introducing new services that provide more value to users. WeChat, in China, is a great example of this strategy. The platform which started as a social messaging app has expanded into new services to drive its revenue growth and create a complete ecosystem for its users, thereby creating brand loyalty.
Notably, many companies have opted for a super app strategy to drive their business growth in the past, and the trend continues in 2022 as brands look to generate more revenue per customer by introducing new services. For instance,
In October 2022, Revolut, one of Europe’s leading neo-banks and prepaid card providers, announced the launch of a new service called Shops for its users in Ireland. Notably, Shops is part of the company’s strategy to create a super app, through which it can generate additional revenue per user. The challenger bank, which provides prepaid card services worldwide, has made a foray into the e-commerce sector with the launch of Shops.
Using the service, Irish users can purchase products from over 1,000 brands without leaving the Revolut mobile app. Some of the major retailers that have partnered with Revolut include IKEA, Harvey Norman, JD Sports, and TK Maxx, among several others.
To make the new service appealing to its 1.9 million users in Ireland, Revolut is also offering 3% instant cash back on every purchase made through its mobile app as long as users purchase products using the Revolut prepaid card. Currently, there are no restrictions on the amount of cashback received. In addition to the 3% cashback, the company also offers discounts on products from various brands. Notably, Irish users can also opt for Revolut’s recently launched buy now pay later service at checkout.
As part of its super app strategy, the company rolled out its Pay Later service to a select group of users in Ireland in June 2022. Notably, the BNPL option allows users to fund their purchases up to €499 and spread the cost over three monthly installments. However, unlike the fee-free, interest-free BNPL service offered by many players, Revolut charges a fee of 1.65% per purchase, which is refunded in the last two installments.
The BNPL payment method is also integrated into the Revolut app, allowing consumers to choose the appropriate payment method at checkout. Users can select the Pay Later option through any of their Revolut prepaid cards, including the Revolut Disposable Virtual Card.
Apart from stores, the company also introduced a vacation home rental service in its mobile app in October 2022. This feature allows users to book vacation homes across the world and receive cash back. The launch of the holiday home rental service is part of the company’s accommodation booking service, Revolut Stays, which has provided over £1.5m in cash back, in October 2022. Currently, the Revolut Stays service is available to users in the UK. and Europa.
Launching all of these services means Revolut is creating an ecosystem where users receive everything in one place, delivering more value to users and generating additional revenue for the business. As of October 2022, the fintech company had over 20 million users worldwide and processed over 250 million transactions per month.
In Ireland, where the company has 1.9 million users, around 40% of the total population has a Revolut account. Having achieved such a high penetration rate in the country is probably why Revolut initially launched its Shops service in Ireland. If the service gains traction and generates revenue for Revolut, the company should roll out shopping capabilities for its global user base over the next three to four years.
Many fintech companies are considering the strategy of super apps to generate additional revenue per user. Klarna, one of the world’s leading players in the BNPL category, is another great example of a company betting on the super app game. For instance,
Over the past few quarters, Klarna has continued to broaden the reach of its supper app strategy. From launching new features allowing users to track their online purchases to introducing a search tool, Klarna is betting big on the super app game to drive revenue growth. In October 2022, the firm also launched a price comparison tool, allowing users to find the products more easily and at the best prices.
One of the main drivers for Klarna to embrace a super app strategy is the potential for increased market share. As BNPL businesses face strong headwinds amid rising inflation, interest rates and cost of living, Klarna is betting on offering more services, giving its platform a way to have alternative sources of income. Notably, offering more and more services on the platform also makes Klarna a lucrative partner for retailers and advertisers.
From a short to medium term perspective, PayNXT360 expects more fintech companies to adopt a super app strategy. Additionally, Revolut and Klarna are expected to further enhance their product and service offerings by launching more value-added services for their users globally.
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This press release was published on openPR.