Super apps are accelerating the growth of digital money transfers

The transfer of money within countries is at the heart of monetary transactions and payments.

Due to global financial inclusion and development efforts and restrictions related to COVID-19 over the past two years, cash payments and usage have dropped significantly, giving way to social messaging and P2P apps to increase their popularity in many markets.

The volume of digital money transfers will exceed $ 300 billion globally for the first time in 2026, up from $ 207 billion in 2022. This represents growth of nearly 50%. superapps, where multiple services, including payments and financial transaction processing, are available in a single app, promote the digitization of formerly cash-based payments, including messaging and access to other services in addition to payments by enabling P2P transactions direct and reducing the need for central intermediaries. Therefore, despite its instant settlement capabilities, the blockchain allows for the interruption of errors, unlike the irrevocability of instant payments.

A major challenger for cross-border international payment systems (SWIFT) is blockchain-based money transfer solutions. The use of digital currencies provides a means by which token-based payments can be transferred instantly, on a P2P basis, regardless of value and without third party intermediaries in the settlement process. In fact, the latest BoE (Bank of England) report on cryptocurrencies from March 2022 recognized the potential benefits of cryptocurrencies in cross-border payments. One of the futures is tokenized stock trading performed on a blockchain which can transact in seconds and reduce settlement uncertainty with much lower fee structures.

There are many examples that include Coinbase’s partnership with Remitly. Coinbase launched a free pilot program to allow Remitly Mexican customers to cash out digital currencies in February 2022. Western Union’s partnership with Philippine blockchain provider Coins.ph to allow users to receive cross-border payments directly into their Coins.ph wallets. April 2019, is another example. Cryptocurrency-based partnerships also extend to other fintechs, DeFi (decentralized finance) aggregators, and banks. In November 2020, DeFi aggregator ADD.XYZ announced that it will partner with numerous mobile money providers in Africa, the wallet of mobile operator MTN Nigeria (as a partner of banks) and Nigeria’s Inter-Bank Settlement Plc, to enable the ‘direct access to DeFi lending thus allowing customers to “send local currencies directly to major DeFi protocols … and other non-loan based DeFi protocols”, such as insurance and NFT.

Social payments

Juniper Research’s research predicts that the top three countries will account for just under 74% of global domestic digital money transfer transactions in 2026. It identified the top three usage markets, China, the United States and India will account for 74% of transactions global by 2026. The lure of social payments, where payments are integrated into social platforms, has boosted transactions in all three countries. WeChat Pay in China and Venmo in the US were cited by research as examples of how social payments are driving domestic money transfers. The report recommends that money transfer providers identify the most popular social platforms in each country and aim to create partnerships that enable social media payments.

Money transfer providers should focus on the fastest growing markets to ensure the best return on investment, with Latin America and Western Europe identified as having the highest projected growth rates. Differentiation will be a major challenge for money transfer apps, especially given the highly competitive market landscape. The report identified the superapp approach, in which a marketplace of different services is offered within the app, as a key to creating money transfer apps that offer greater value to users. Therefore, it recommends that providers integrate with other financial service providers and e-commerce merchants to enhance the unique user value of their applications.

Payments as a platform

In short, PaaP is a superapp-like business model for mobile money providers that offer services that put payments at the heart of their business, from basic daily activities, such as transportation coverage and food delivery, to those more related to lifestyle (e.g. e-commerce and associated benefits and rewards). The model allows MNOs and other suppliers to diversify their products, adding additional revenue streams and reducing the costs of serving customers. It also helps to capitalize on existing user bases and add new users and fend off competition in the market. It is based on a relatively simple proposition, such as mobile money, which is a secure and convenient P2P payment solution between mobile users.

Outside of the immediate context of mobile money, PaaP enables access to cloud-based services from actors in the payments ecosystem, such as banks, PSPs (Payment Service Providers), buyers and issuers, as well as fintechs and other actors. , and Reduces Implementation As banking services are increasingly accessible from mobile devices, PaaP offerings for rapid application development and enrichment become vital. Thanks to the open APIs, these offers can be easily leveraged by different actors, including end users / customers.

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