WeChat’s domination in China offers telltale signs about the future of mobile banking in the coming age of the super app.
In less than a decade, the speed, simplicity and mass adoption of mobile payments has turned China from a cash-only society into an increasingly cash-free society. The West has seen a similar shift with reports increasingly stating that people are carrying less cash. While we don't expect WeChat to come to the West, WeChat's success in China provides clues of what the future of mobile banking in the West may look like.
The future of mobile banking in the West
- Payment via mobile could become increasingly popular, however, mobile payment providers will need to disrupt contactless credit card usage to encourage and develop trust in mobile payment technology.
- Visa and MasterCard facilitate payments as a middle man between you and your bank, but Facebook could deal directly with your bank, effectively eliminating credit cards.
- Just like WeChat, Facebook has already integrated a QR code system and reader, opened up APIs for brands to integrate with Messenger, launched Facebook Payments and looks set to further extend its payments capabilities in the months ahead.
- Facebook is already testing further functionality that could indicate a move to becoming a ubiquitous one-stop mobile platform.
- Facebook will need to convince people of the value of adding their banking information to a third-party platform whose origins are unrelated to the payment industry.
- In the West, we would still need to embrace QR codes and NFC payments further for the super app style mobile payments to gain traction, something major tech providers are already enabling.
- Legislation is being passed in the UK dictating that banks must share their data with third parties. However, no such change is planned for the USA which could effect proliferation of the super app experience
The bottom line is that apps need to start incorporating in other APIs and services which will provide new payment opportunities for people and retailers alike. By doing this they can help normalise the change in the West which could facilitate wide-scale adoption.