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The B2C consumer payments sector has been disrupted by fintechs, neobanks, and bigtech companies in recent years.
Traditional banks and Payment networks have lost some brand salience as consumers gravitate towards digital wallets like Apple Pay and Google Pay.
However, the payments sector is set for further disruption with the rise of real-time, account-to-account payments and the emergence of super Apps. Super apps, described as Swiss army knives of apps, offer a range of services and offerings in one place.
They provide a seamless experience for users by integrating various products and services from different partners.
Super apps like China’s WeChat and AliPay have gained significant traction in Asia, while players in the West like Revolut, Uber, Amazon, and Meta are eyeing the super app opportunity. For banks, the rise of super apps poses risks and opportunities.
Super apps could potentially replace banks’ apps as customers use them for various services, including payments, loans, investments, and insurance.
Banks may lose out on transaction fees and struggle to compete with the personalized services and loyalty programs offered by super apps.
However, banks have the advantage of trust, with many users preferring to use their bank’s app for all payments. Legacy technology is a significant hurdle for banks looking to create super apps.
Many banks rely on outdated payment systems and data siloes, making it challenging to integrate new features and provide personalized experiences. However, integration platforms that connect traditional payment rails with new digital channels can help banks overcome these obstacles and keep up with fintech innovation.
To remain competitive and relevant, banks need to meet consumer expectations for convenient, simple, fast, and personalized banking experiences. Super apps offer an opportunity for banks to refresh their customer experience and improve engagement.
Adapting to these changes and addressing legacy technology challenges is crucial for banks to thrive in the evolving consumer payments landscape.
