Super apps are increasingly taking over the world by storm. But what’s a super app? It is a mobile or web application that can provide multiple services including payment and financial transaction processing.
It is essentially an all-in-one solution to mobile application design. It manages all the needs a user could have in one place, reducing the need to download multiple apps to perform different functions.
Super apps comprises social networking, shopping, banking services, and more.
The story of super apps started in 2010 with Mike Lazaridis, the founder of BlackBerry. He envisioned the super app as the “ultimate solution”, a marketplace with different offerings, using in-house technology and third party integration.
In Africa Vodacom has been leading the push for super apps. Last year it partnered with China’s technology giant Ant Group to develop a “super-app” that puts a virtual marketplace in the hands of users.
The multinational says uptake of its VodaPay service has beaten projections, adding that the platform gives a glimpse of how Safaricom’s M-Pesa could evolve in future. One does not have to be a Vodacom subscriber to use VodaPay, but this is not the case with M-Pesa which is not a super app.
“In South Africa, the launch of our VodaPay super-app in October last year has exceeded our expectations by attracting 1.4 million downloads and 1.0 million registered users in its first three months,” the Johannesburg Stock Exchange-listed firm said in its third-quarter trading update.
“We see VodaPay as a precursor to M-Pesa’s evolution and further strengthening our fintech position across our footprint,” Vodacom said.
The respective performance of VodaPay and M-Pesa in South Africa is an indication of how changes in technology and value-addition can drive demand for services. In Kenya, the basic M-Pesa service became popular as soon as it hit the market since it could be used on feature phones without an internet connection and gave millions of unbanked people access to formal financial services.
The fact that one has to be a Safaricom subscriber to use M-Pesa has not undermined its growth since the telco has the largest market share in the sector.
In South Africa, the uptake of banking services was higher and a new way of sending money was not as compelling, with the use of transactional bank accounts estimated at above 80 percent.
But VodaPay, coming at a time when smartphones and the internet are more widespread, has added value to the base mobile money platform and made it available to those not subscribing to its traditional telecom services.
Smartphone penetration had already HIT91.2 percent in 2019, according to the Independent Communications Authority of South Africa.
A smartphone is a mobile phone with advanced features including Wi-Fi connectivity, web browsing capabilities, a high-resolution touchscreen display, and the ability to use apps. Most of the devices run on Android and iOS mobile operating systems.
“Through innovative digital technologies, VodaPay provides you with inclusive mobile and financial solutions to make your life a little easier, and a little cheaper,” Vodacom says of the service.
“As a super app, VodaPay offers a whole suite of some of the products and services that you use, order, and buy every day, all in one app.”
The company noted that it also offers customers exclusive deals and discounts from brands and partners within the app, with Vodacom customers benefitting further from waiver of data charges.
Some of the firms that have partnered with Vodacom to offer discounts in South Africa are fast-food chain KFC and home improvement materials supplier Builders.
Vodacom’s new experience shows that the fight for customers in the fintech space will, going forward, be characterised by enhancing convenience, offering deals, and aggregating a wide range of providers of goods and services.
The VodaPay app is powered by China’s online payment platform Alipay, which has more than one billion users and is owned by Ant Group.
The full Alipay app has a wide range of capabilities ranging from financial services, entertainment, shopping, merchant services, and direct marketing.
Most of these features are best suited for smartphones, with Vodacom saying it will use the learning experience in South Africa, which has greater uptake of the high-end phones to inform the expansion of similar apps in other markets.
Falling Internet charges and smartphone prices are expected to make Kenya and other African countries ripe for widespread uptake of financial services apps that are not bundled with traditional telecom services such as voice.
The number of smartphones in Kenya had grown to 26 million in the quarter ended September 2021, accounting for 44 percent of the total 59 million mobile devices in use in the period.
It remains to be seen whether other telcos will copy Vodacom to offer a network-neutral fintech service.
Safaricom has been modifying M-Pesa to cater to the tech-savvy generation but with a preference to limit it to its customers.
The M-Pesa app launched last year, for instance, requires one to have the telco’s SIM card and be a registered user of the service when signing up.
“The myM-Pesa App is available for Safaricom PrePay and Postpay subscribers who utilize android and Apple iOS devices but are registered on Safaricom’s M-Pesa service,” the company says in the service’s terms and conditions document.
“Safaricom reserves the right to offer or decline access to the myM-Pesa App to non-Safaricom customers for technical or operational reasons.”
On subsequent use, one can use mobile data or Wi-Fi to operate the app. Safaricom’s rivals Airtel Kenya and Telkom Kenya have been pressuring government regulators to order the company to open up its mobile money service, saying the status quo is hurting their ability to compete.
Safaricom charges more for cash transfers to customers of rival networks than on-net transactions. The company has defended itself, saying every operator has an opportunity to grow its market share through innovation and the necessary capital investment.
Mobile operators, who are the biggest players in Africa’s fintech sector, are attracting investors and global payment service providers seeking to ride on their large market shares and brand acceptance.
Vodacom has received unsolicited offers to sell a stake in the continental M-Pesa business at a major premium but has rebuffed the proposals, saying it could get even better exit prices in two to three years after growing the platform further.
Airtel Africa, meanwhile, has raised a total of $550 million (Sh62.4 billion) by selling minority stakes in its pan African mobile money business.
Financial services firm Mastercard, for instance, invested $100 million (Sh11.3 billion) to acquire undisclosed minority ownership in Airtel Money last year, with the parties agreeing on a commercial partnership.
It was one of several investments in Airtel Money which also featured financial investors without operations in the global payments sector.
The partnerships being developed by Airtel and Mastercard will be available in 14 African markets where Airtel Money is available including Kenya, Nigeria, and Uganda.
“Alongside the investment, the group [Airtel] and Mastercard have extended commercial agreements and signed a new commercial framework which will deepen their partnerships across numerous geographies and areas including card issuance, payment gateway, payment processing, merchant acceptance, and remittance solutions, amongst others,” the telco said in a statement earlier.
Mastercard will become the latest partner to boost Airtel Money’s array of services including mobile wallet deposit and withdrawals, merchant and commercial payments, benefits transfers, loans and savings, virtual credit cards, and international money transfers.
The telco has sought to expand the subscriber base and use of its mobile money platform through partnerships with multiple financial services firms.
It has, for instance, signed agreements with cash remittance companies MoneyGram, Mukuru, and WorldRemit.
The telecoms operator also plans to introduce new banking and remittances services in partnership with London-based lender Standard Chartered Plc which has subsidiaries operating in 16 African markets.
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