Reimagining digital commerce
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Marketplaces have served society for millennia. For example, the Grand Bazaar of Tabriz, one of the world's oldest markets, was a place where you could find everything under one roof and was visited by Marco Polo himself. It provided for commercial needs, social exchanges, and cultural interactions. In many ways, super apps are the modern-day equivalent of the ancient bazaar. These hyper-performant offerings provide multiple services, including payment and financial transaction processing, effectively becoming self-contained platforms. Like in the Grand Bazaar, the breadth of goods and services you can buy is diverse. Within a few swipes, you can buy a wide range of goods or arrange to pick up a package, hire a dog-walker, find a cab, or even process an on-time bill payment. Advances in technology and APIs have enabled marketplaces to migrate toward the super app model as they widen the breadth of their services. For a long time, super apps only had limited options and control over the payments landscape, but this may be changing for 'last-mile' connections due to recent innovations. With the growing adoption of open banking and the technologies that enabled its application, super apps are now exploring how they can better embed financing options into non-traditional channels to complete the journey. Ultimately, the promise of seamlessly enabling greater consumer choice comes to fruition at all levels.
Marilyne M Chew Sinéad Fitzgerald Jeannie Hii Maja Lapcevic Elisabeth Riedl Nima Sepasy David Wilkins
Lisa Bongiovi Jean Crawford Rashmi Dalai Zhixin Kwan Li Li Ling Naresh Ponnana Jennifer Powsner Tobias Puehse
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A classic model, reinvented
Letter from the editor
In this issue
08
The future awaits
03
An embedded commerce experience
06
Putting consumers in control
05
Raising the bar with APIs
04
Key drivers for enabling super apps
02
Makings of a super app
01
The app revolution
07
Commerce in the digiverse
The app revolution is reshaping commerce
An app-first approach As digital commerce has become a mainstay in the retail customer journey, brands and merchants have tried it all – learning to sell directly through their websites, via marketplaces and, of course, through apps. After all, mobile has continued to dominate consumers’ time in the digital world.
Forecasted growth rate by 2025
50%
Global retail e-commerce sales in 2021
$4.9tn
Apps offer brands and merchants a single platform to market their products and services and to complete the customer journey through payment and fulfillment. Once they achieve the preferred customer experience, they can expand across multiple use cases to solve numerous consumer needs via their mobile devices.
Projected rate of increase of the global social commerce market by 2027
31.4%
Social media users as a percentage of the global population
53.6%
Super apps or marketplaces? There has been debate over the super app model and whether this is the best way for apps and brands to grow. Some super apps like Wechat or Grab launched with a single service before extending their fulfillment capabilities and bringing in 3rd party providers. Other apps like Tencent, Alibaba, and Amazon began as marketplaces matching buyers and sellers before venturing into new categories or services. Major brands have also made efforts to go direct-to-consumer. While some brands use their super apps and marketplaces to reach customers, others have invested in improving their websites, launching apps, or creating 'official online stores,' even within other e-marketplaces. In emerging markets, where we find low market maturity and few established players in any category, early movers have been more adept at leveraging technology and pushing hyper-localized offerings than many e-marketplaces in more developed markets. Whether apps expand through their dominance of a particular category or via a marketplace platform, they usually share a need to operate and function smoothly as a mobile-first, all-in-one offering. eMarketer reported that smartphone users in the US spent 4 hours on the internet per day in 2020, with 88% on apps, not browsers.
THE APP REVOLUTION
This focus on time spent in-app is crucial for super apps as brands seek to extend their engagement with consumers, regardless of whether it adopted the strategy of a single provider fulfilling all categories or as a tech-enabled marketplace convening various sellers.
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E-commerce has risen significantly over the last few years, a trend expected to continue at a compound annual growth rate (CAGR) of 14.7% from 2020 to 2027. Globally, consumers have certainly helped fuel this rise as more pivoted to buying on their devices.
Home
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Sources: 1. Grandview research Market Analysis Report; 2.Statista 2021; 3. WeareSocial, GWI Digital 2021; 4. Research and Markets, Social Commerce Global Market Trajectory & Analytics 2021; 5. Mobiloud.com - Mobile apps vs mobile websites
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4
A one-stop portal for numerous consumer journeys may seem like a tall order in an ecosystem of more than two million apps (more if you’re using Android). Yet, we are seeing apps progressively expand beyond their core offerings to offer complementary services as they seek continuous engagement with their customer base.
The social media phenomenon Consumers' attachment to social media channels also contributed to the focus on apps. While adoption and comfort with social media have been rising across ages and segments, we witnessed a noticeable uptick during the pandemic. This usage led to increased social media's influence on digital commerce.
Industry definitions tend to place social commerce within the larger e-commerce umbrella – even though some social commerce transactions often take place offline. Most agree a given transaction is tagged as social commerce if social media tools were utilized via one or more interaction points during the journey. As social media platforms increasingly focus on the monetization of their audiences, there is a clear runway for brands to engage with shoppers in meaningful new ways.
Incorporating social media throughout commerce Social commerce is often catalyzed by online relationships, whether with friends, family, influencers, or business. Social media can strongly influence purchasing decisions because the interaction is more personal and can be tailored and individualized. It is no wonder that a recent poll showed over 70% of businesses surveyed rely on social media for engagements, where it was the preferred channel.
Mobile internet: Average daily time spend in the US, App vs. Browser, 2018-2022
hrs: mins per day among population
2018
2019
2020
2021
2022
App
Browser
0:25
0:24
0:23
2:49
3:10
3:35
3:41
3:47
3:15
4:01
4:06
4:11
Source: eMarketer, April 2020
Discovery
Search
Post purchase
Purchase
First influence Scrolls through social media and sees friend’s post of a new purchase.
Browse within social media Clicks on brand’s social media page and browses. Enters brand's e-store in marketplace app linked from social media
Bookmark and converse Sees similar products recommended in the app. Adds all to shopping cart to compare options. Seeks opinions from friends by sharing product links through messaging apps.
Comment and share Receives product at doorstep. Shares purchase and give reviews on social media.
Seamless checkout Pays with credit card stored in app. Gets instant confirmation and shipping status updates. Decide to buy Finalizes decision while watching livestream. Adds item to cart and checks out. Dig deeper Watches a livestream hosted by the merchant. Asks questions and gets answers in real time.
Evaluation
A social-first shopping journey of a consumer today
1
5
Another aspect of social commerce driving the super app trend is the circular nature of the buyer's journey – a good purchase experience typically builds trust and encourages returning business. With increased reliance on the overall customer experience, apps can expand their relevance across multiple customer journeys that target consumers – from transport and travel to shopping and groceries.
Keep me updated
Let me communicate
Get me to my destination
Buy me food
Let me shop
Deliver my things
Get me traveling
Entertain me
Pay my bills
Let me pay!
Integrating across multiple journeys
Super apps are one-stop portals from which users can access multiple services. They usually start as single service apps, such as ride-hailing or even connectivity. Focusing on this consumer need helps contour the service delivery itself, enhancing its stickiness.
Beyond Silos
In Data We Trust
Protect and Serve
The Emergence of Secure Data Sharing
Striking a Balance
The Empowered Consumer
Spatial Audio
A Growing Digital Footprint
In this edition
MakinGs of a Super App
Using insights to transform services Super apps’ primary objective is customer acquisition first. They get users accustomed to transacting with them, eventually becoming a regular part of everyday life. Mobile wallets were the initial solution, especially for super apps originating from emerging markets. They provided the capacity to reach the masses where traditional financial institutions still underserve many. Once a significant portion of consumers manages daily tasks via their app platform, super apps can help brands learn more about their users and better engage their customers in additional services. These insights allow them to expand financial functionalities even further toward lending capabilities. For instance, Amazon, Ant Financial, and Tencent have also ventured into financing solutions such as loans to small and medium enterprises (SMEs) to support improved cash flow management.
Automating mundane tasks The app then takes this same proposition and expands to other seemingly unrelated activities. From ride-hailing to offering grocery deliveries and then pivoting to offer an easier way to pay one's utility bills directly through the app instead of running multiple logins to various utility service providers. In truth, these new services included often revolve around automating and simplifying consumers’ more mundane daily tasks. Utilitarian in nature, these tasks were simply dormant opportunities revolving around everyday life that were waiting for a tech uplift. The development of in-house technology and multiple third-party integrations further enhance their impact.
The average time spent per day on social media globally stands at 142 minutes in 2021 – a significant jump from the 90 mins 10 years ago. Social commerce increasingly weaves commercial opportunities across online relationships with friends, family, influencers, and businesses. As a result, the experience is considered more personal, individualized, and intuitive. Consumers continue to value the prospect of keeping up with the latest news and trends and immediately accessing the items they see featured. Meta embarked into the social space with Facebook, while Instagram incorporates shopping and even live streaming services to help merchants connect directly with consumers. (rollover company name to explore further)
The success of ride hailing companies was a turning point for the transport industry and tech startups. Uber turned heads when it became the most valuable startup in the world in 2015 (USD51bn). A good number of today’s super apps kicked off their quest for market domination through ride-hailing services, which were seen as a low-cost point of entry and afforded options to amass user base with speed. Asian platforms Grab, Gojek and Ola, as well as Dubai-based Careem all began as ride-hailing offerings. (rollover company name to explore further)
Social commerce, by definition, starts at the point of communication. A transaction is typically classified as social commerce when brands leverage social media to communicate directly with the consumer during the purchase journey. The motivation for triggering a purchase is often emotional as well as impulsive. With greater bandwidth, communication need not just be via text and still visuals alone. Look at the success of combining video and social commerce in the case of live streaming.
Let me pay
Facebook revolutionized how users could interact with one another. As it took off, the organization rapidly expanded its social network. Over time, the group acquired other social media brands and functionalities. It also incorporated new communication functionalities, enabled shopping opportunities, and even extended its user profiles function to permit access to third-party apps as a form of identification. WhatsApp has also started offering real-time payments through Facebook Pay in Brazil. Leveraging Mastercard Send technology, the program went live in May 2021 when Mastercard debit cardholders with cards issued by Banco Inter, Itaú, Nubank, Santander, and Sicredi were enabled to send and receive money to and from friends and family through the app. With Facebook, Instagram and WhatsApp combined, Meta has over 3.6bn active monthly users –just under half of the world’s population.
China has earned the reputation of being the largest e-commerce market globally. The two leading Chinese platforms, Wechat and Alibaba,both serve as models for other super apps and evolving marketplaces. In keeping with the multifunction theme, both brands allow third parties to offer mini-programs or ‘applets’ within their apps and enable marketers to personalize content for users and offer loyalty discounts and coupons. Mobile commerce will continue its domination in retail commerce with the proliferation of shopping apps Shopee, Tokopedia, and numerous additional ones worldwide. (rollover company name to explore further)
Like ride-hailing, food deliveries are often a breakthrough service for tech startups to embark on consumer relevancy and growth. Global online food delivery achieved total global revenues of $293.6bn in 2021, with platform-to-consumer delivery accounting for 64% of market volume. Super apps such as Gojek and Rappi have been at the forefront of this trend to bring the tech-enabled ‘gopher’ service to fruition. Industry experts expect continued and significant growth as populations continue to adhere to social distancing guidelines and remote work options become a permanent feature. (rollover company name to explore further)
In many ways, the creation of Online Travel Agents (OTAs) and aggregators are examples of a specialized marketplace model – starting as desktop platforms. These OTAs combined transport and lodging options, deals for tourist attractions, ancillary services like insurance and WiFi, etc. Companies like Expedia, Booking.com, and Agoda pivoted their services to mobile as soon as customers felt more comfortable completing their reservations and paying inside the same app. Other competitors such as Trip.com (previously known as C-trip), Traveloka, and Klook also focused on a mobile-first approach early on in their strategy. In April 2022, Uber announced plans in the UK to integrate services offered by airlines, bus and rail operators, and car rental companies to build the travel super app.
Entertainment on mobile comes in various forms – think games, content viewing, and social media. In both Google Play and iOS app stores, games continue to be ranked as the most popular app category in 2021. That comes as no surprise, given that the growing availability of smartphones and the proliferation of casual games available make gaming an essential form of entertainment. 68% of internet users are actively playing games on their mobile devices. Gaming has been forecast as the next tech battleground by various industry experts. This view is bolstered by Microsoft's recent acquisition of Activision Blizzard in January 2022, making it the 3rd biggest game developer company behind Tencent and Sony. Mobile gaming looks to continue its meteoric rise, making up 57% of global gaming revenue in 2021 (Statista). Game developers Tencent and Garena have a significant part in enhancing their groups' super app status. (rollover company name to explore further)
The payment experience in an app environment is varied as many apps and marketplaces explore building out the ideal payment experience. Some look inward to build out their own - both WeChat and Alibaba looked to offer full end-to-end user journeys within their platform. In a matter of years, Wepay and Alipay quickly became key payment enablers beyond their app environments, making digital payments possible across China. M-Pesa in East Africa has also looked to emulate this success in a similar manner in payments. Many mobile wallets or payment platforms have tried to do the same. Venmo, Paytm, Zalo Pay, all strive to offer consumers a digital alternative that functions both in and outside the digital world. (rollover company name to explore further)
Both billers and payers seek the same outcome in bill settlement: the quickest and easiest way to confirm services used and a simple payment process. With digital tools and APIs in place, this is finally being realized as banks and apps such as Paytm and MTN Mobile Money look to offer a contactless, digital means of settling one’s bills. Mastercard has presently rolled out Bill Pay to enable secure and straightforward registration and biller-set up for payers to view, manage and pay their bills. The solution can be integrated via APIs to connect Bill Service Providers and Financial Institutions via one’s mobile banking app. (rollover company name to explore further)
From ride-hailing to offering delivery services, many of today’s super apps or leading marketplaces have made their mark by ensuring last-mile delivery of consumers’ purchases across retail, food, and groceries. Same-day delivery services are already a lucrative market, valued at USD$5.14bn in 2021. As Covid-19 continued to push many to deliver services for various purchases, this trend is set to grow further. Tech giant Amazon and Latin American super app Rappi are examples of brands that have made their name by excelling in their commitment to service and last-mile delivery. (rollover company name to explore further)
Let's imagine our digital commerce experience with embedded solutions
WeChat has become an integral part of daily life for Chinese users. From messaging friends, buying daily necessities, taking a ride, booking a doctor’s appointment, and even contracting financial services, the app does it all. As the world's fourth most used app, WeChat’s over 1.24bn active users have transacted RMB$1.6 trillion RMB in 2020 through its 3.2m mini-programs.
The ecommerce giant has been a strong contender as the Chinese super app. As a mobile and online payment platform that enables merchants to load mini-programs onto its platforms, it commands a significant share of the third-party payment market in China. Alibaba’s acquisition of the regional ecommerce platform Lazada in 2016 enabled its continued expansion and integration of T-mall services in Southeast Asia. That same year, Alibaba announced it would launch the Electronic World Trade Platform (eWTP), which enables small and medium enterprises to participate in global commerce more easily by creating a global trade network between China and participating countries.
Founded in Columbia in 2015, Rappi started its delivery business with a mobile-first solution for groceries, food, and laundry. It later expanded its solutions services to collecting drugstore medication and launching a courier service for running smaller errands (i.e. picking up house keys personal belongings, and sending money). Growing quickly to over 1 million deliveries, Rappi now offers its services across Colombia, Mexico, Brazil, and Argentina.
Gojek was initially a call center and later emerged as a hyper-local courier delivery and two-wheeled ride-hailing service in congested Jakarta, Indonesia. It expanded to rural areas and then ventured to other Southeast Asian markets with its ride-hailing services. In 2021, Gojek and the leading Indonesian shopping commerce app, Tokopedia, integrated under the holding company, Goto. Together, they contribute 2% to Indonesia’s $1tn GDP.
Kakao started in 2010 as a messaging platform in South Korea. It connected users and merchants by allowing consumers to browse through shopping platforms and pay through their Kakao wallet - available online and offline. Kakao then ventured into ride-hailing services and eventually launched its digital bank in 2020. The Korean super app holds the accolade of having the first digital-only bank in Asia to go public, after raising $2.2bn in an IPO last August.
Grab has been one of the more successful platforms from Southeast Asia. Initially entering the market as an alternative ride-hailing service to public taxis, it quickly expanded to offer delivery services for groceries, food, and gifts. Grab has more recently ventured into in-store and online payments. Grab now operates in 8 countries and across multiple categories. The company serves more than 187m users in over 350 cities and implements different strategies in each market. In Singapore, Grab teamed up with telecommunications brand Singtel, and successfully bid for one of the first digital banking licenses awarded by the regulators just last year in 2020. In December 2021, the team in Malaysia announced the acquisition of premium supermarket chain Jaya Grocer which is currently in progress.
Since its inception, Amazon looked to offer a seamless experience right down to the delivery. Amazon successfully deployed same-day delivery as early as 2009 in 7 select cities in the US. In 5 years, they managed to increase the number of orders by these same customers by as much as 10 times and used the same approach across more cities. Its success in delivery is largely due to a centralized fulfillment platform that they pioneered in the US, emulating the same strategy after expanding their services into India. Amazon is now looking to build out its last-mile delivery services and is investing heavily into logistical pilots as well as third-party partnerships, all in the quest for greater control to deliver on their promise on customer satisfaction. The tech giant is also further evolving its offering as a super app in the US and India. Amazon launched its food delivery services in 2020 at select locations within Bengaluru, India, to add to a growing list of services– from ecommerce, e-groceries, payments, travel, movie-ticket bookings, insurance, and even education.
Paytm has been a major contributor in helping India accelerate its digitization efforts. After the government announced the demonetization of the 1000 and 500 currency notes in 2016, Paytm was a digital alternative that catered to the Indian people’s daily needs, enabling payments with no hidden charges and allowing access to funds when physical cash was sparse. Since 2019, Paytm now counts on more than 450m registered users and 130m active users. It is also a fully licensed digital bank.
MTN offers a secure mobile wallet linked to an MTN mobile phone number that can be used to receive and store money, send money to others and even pay bills and insurance as well as settle salary payments and school fees, etc. MTN mobile wallet has become a strong contender for super app status in the African region thanks to MTN’s partnership with over ten partner banks, expanding its use across several African countries.
Shopee, a leading ecommerce player in Southeast Asia challenged the incumbents Lazada, Zalora, and Tokopedia when it expanded its commerce footprint across the region in 2015. Despite being a latecomer, Shopee deployed incentives and aggressive marketing campaigns to rapidly expand its footprint, eventually claiming the title of Southeast Asia’s biggest e-commerce platform with 343m monthly visitors. The ecommerce platform then moved into Latin American markets between 2019 and 2021 and Poland from late last year. Shopee has just launched ShopeePay in the last year and more recently, ventured into financing (SPayLater and food delivery (ShopeeFood) services. However, as part of the biggest public company in the region, SEA Group, they can potentially leverage partnerships with Garena and AirPay, to further expand their user base and benefit from the group’s combined strengths.
With over 62m users as of 2020 (an 18% YoY increase), Zalo is Vietnam’s leading instant messaging app and social media platform. Post its success, ZaloPay was introduced as an e-wallet from which users can transfer money, pay for goods through QR codes, pay bills and even top up their mobile phones. With the integration of the two together, Zalo has looked to partner with e-tailers Tiki, Lazada, and Sendo to attract wider usage. While WeChat's parent brand Tencent is an investor Zalo continues to operate separately.
$79.64BN
Total US retail social commerce sales by 2025
China will generate in livestreaming social commerce sales alone in 2021
$131.52BN
Messaging and social media apps such as Wechat, Kakao, were quick to leverage this. These super apps moved quickly to develop their payment products and offered them externally as well. (rollover company name to explore further)
Ola Cabs is an Indian multinational ridesharing company that is headquartered in Bangalore, India. Founded in 2010, it is now India’s largest mobility platform that offers not just ride-hailing but also car rental services, operating in over 250 cities across India, Australia, New Zealand, and the UK. Ola has also expanded into used-car marketplaces, cloud kitchens, and of course financial services.
Game publisher Garena represents a key pillar of the SEA group’s super app strategy, alongside Shopee and Airpay. Headquartered in Southeast Asia, the team quickly recognized consumers’ need for social interactions and fun ways to connect safely in current conditions and embarked on a strategy to engage new and existing users with creative and hyper-localized content. Their efforts paid off with the Battle Royale Shooter game, Free Fire, taking top honors as the most downloaded mobile game globally in 2020 and generating $255m in revenue as of Q1 2021.
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AN Embedded Commerce Experience
Sources: Google; Korefusion proprietary research, 2021; Wechatwikii.com; Digital Comemrce 360, Social commerce is leading the future of ecommerce; Investopedia, Uber; Statista 2021, Online food delivery worldwide; Yahoo! Finance, Same day delivery services global market report 2022; Brand2global.com; Techtarget.com; How Stuff works; Kr-asia.com; Optimizely.co, global travel report; Data reportal, Digital 2022 Global overview report; CNBC, Uber looks to create travel 'superapp'by adding planes, trains and rental cars; Arab news, Careem grows beyond original avatar; CEO eyes 'Super app' status; Connecting Africa, Safaricom launches M-Pesa super app
Careem started off their Super app journey as a ride hailing app back in 2012 before quickly expanding to offering food deliveries, grocery shopping, bike rentals, cleaning and payments. Uber's acquisition of Careem back in 2019 certainly helped its expansion plans, though, similar to other Super app pioneers, the two brands are run independent of one another to allow Careem to continue its vision of attaining the super app status in the Middle East. Today, Careem operates mobility services in the region with the intent to bring its other offerings to more markets in the next couple of years to truly reflect its Super app status.
Kenyan-based Safaricom initially launched M-Pesa as a SMS-based service allowing users to store and transfer money through their mobile phones in 2007. They quickly expanded coverage to 10 countries, including India and Romania. In 2021, it relaunched the service as a Super app to enable users to do more than just facilitate the transfer of money. In fact, they seem to be taking a page from the Chinese super app playbooks and are looking to enable applets so users can purchase tickets, gift vouchers, insurance and even gas delivery. Their unique value proposition: M-Pesa offers an 'offline mode' that allows customers to complete transactions even when they are not connected.
Building blocks of the app economy
New products and services differentiate their value proposition through their final offering. Emerging markets usually offer ubiquitous challenges because they have yet to mature and homogenize. Nevertheless, they can provide an open canvas for players to chart different ways of addressing challenges.
KEY drivers for enabling super apps
Market Drivers
adults globally remain unbanked as of 2017
1.7BN
Significantly larger young population base that grew up as digital natives
Limited access to formal financial services leads to multiple opportunities available
Open banking frameworks help stimulate competition and innovation in the financial services market
Thanks to API-friendly interfaces, Financial intermediaries offer traditional and neo banks the tech uplift needed to offer up new and improved solutions
Digital savvy consumers, buoyed by increasing internet penetration
Penetration of affordable smartphone adoption for a mobile first enablement
of the global population under 30 years are emerging markets
90%
countries have introduced mandatory regulation
44%
global smartphone users as of 2021
81%
people around the world are now online (as of April 2021)
>6/10
The Global embedded finance opportunity is projected to grow up to USD7tn by 2030
$7TR
Market drivers often comprise demographic characteristics and industry-specific dynamics that impact the market's maturity. Additionally, they encompass consumer-led expectations, which influence the adoption of new solutions. Access and availability of services within the market are also strong indicators to consider.
(rollover circles to navigate)
The factors supporting a super app-friendly economy can be distilled into 2 broad areas:
In recent years, the speed at which technology has advanced also enhances the environment for super apps to flourish. This leap forward includes the availability of higher bandwidth networks and the continued adoption of personal devices. Technological drivers bring solutions closer to consumers and help challenge legacy responses.
MARKET DRIVERS
TECHNOLOGICAL DRIVERS
Keep me posted
Sources: 1. Euromonitor.com; 2. Global Findex, World Bank; 3. Moneythor on global open banking 2.0; 4. We are social, Kepios analysis; 5. Bankmycell, How many phones are in the world; 6. Simon Torrance, Matt Harris Bain Capital Ventures
6
Supercharging the customer experience
Application programming interfaces (APIs) enable different programs or software to communicate more efficiently. APIs allow fintechs to compete more effectively and deliver improved solutions, right down to the last mile.
raising the bar with apis
Mastercard Developers
Innovative businesses and bold ideas need to be able to rely on a partner whose belief and ambition match their own. Mastercard Developers is a portfolio of solutions for the fintech segment, spanning beyond payments to provide security, loyalty, data and open banking solutions. It provides a clear path for every fintech builder and payments developer to work with Mastercard, using our API platform and tools, global network, multi-rail solutions, qualified partners, and dedicated programs to help them succeed.
Fintechs that support these enhanced experiences are already making significant headway in global economies. Fintech-enabled marketplaces often have a higher valuation multiple than stand-alone marketplaces or financial services. Given the rapid emergence of digital form factors, innovation in user experience, and changing customer demographics, these financial intermediaries can offer essential building blocks for players in the ecosystem. API platforms are working to connect companies and fintechs more quickly by building out infrastructure to enable easier systems integration. Mastercard looks to bring some of these solutions closer to Financial Institutions. For instance, our recently announced partnership with Zeta, a banking tech unicorn and a Mastercard Start Path graduate. Zeta's cloud-native, fully API-enabled, pre-integrated omni-stack helps players significantly reduce their time-to-market and build exceptional customer experiences.
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Built for developers by developers, our technology and solutions are simple to use.
• APIs with sandboxes, documentation, guides, tutorials and reference code so you can explore, test, and build seamlessly
• Products that have you covered with everything from fraud technology to data services to new ways to pay
• Multi-rail capabilities from cards to bank account-based payments, digital wallets and blockchain
• Strong and secure global infrastructure powering everything behind the scenes
• New product investment, research and development on 5G, quantum, blockchain, etc.
Our network enables fintech builders to launch new products and connect with the right expertise through integrated partnerships.
• Support for product-centric fintech builders, putting their solutions into customers’ hands
• Quickly find a qualified tech enabler through our partner network Mastercard Engage
• Mission-aligned to do well by doing good, promoting inclusive growth
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Using every tool to encourage scale and growth, turning great ideas into profitable businesses.
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Our stack (Tachyon credit) allows issuers to increase the lending book by composing contextual upsells using our extensive APIs and SDKs; reduce costs via pay-as-you-go SaaS billing, improve customer satisfaction by launching rich, self-serve experiences for cardholders; and launch and iterate faster using our infinitely scalable cloud-native deployment. In Mastercard, we have a partner that is commited to undertake this journey with us and truly believes in this mission.
"
Bhavin Turakhia, Co-founder & CEO of Zeta
Sources: 1. Fintech and online marketplaces, Dealroom.co; 2. Bloomberg.com March 2022
Integration is everything For super apps or marketplaces, APIs support integrating a customer experience, keeping the user within a given app’s native environment. Minimal transfer at each touchpoint is made possible with APIs, ensuring brands can complete purchase fulfillment. Presently, APIs fit into the journey to enable super apps and e-marketplaces to onboard partners and integrate them into their platforms. As entities prepare to operate in the Web3 environment, there lies the opportunity to connect with multiple service providers for a given feature. These service providers would have already been vetted by the community and with web APIs, they can be easily connected to an organization’s platform operating on the cloud. For instance, they can tap into multiple logistics vendors at any given time and allocate based on available resources beyond their capabilities. This connectivity enables businesses to increase transaction volumes much quicker and more efficiently.
Mastercard looks to bring some of these solutions closer to Financial institutions. For instance, our recently announced partnership with Zeta, a banking tech unicorn and a Mastercard Startpath graduate. Zeta's cloud-native, fully API-enabled, pre-integrated Omni stack is designed to help players significantly reduce their time-to-market and build exceptional customer experiences.
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API
Super App
Marketplaces can connect with brands’ inventory systems to initiate the sales order. APIs support integration of solutions to increase customer satisfaction e.g. helpdesk support, live chat, CRM, etc.
Businesses can embed payment solutions more easily within app environment. Engaging logistics companies to ensure delivery of purchased items to their customers more easily.
Consumers can design their own banking experience
While APIs provide organizations with technical capabilities to integrate features and services for an improved customer experience, open banking represents the framework that enables companies to use consumer-permissioned data to offer these services more seamlessly. Regulators who have embraced open banking frameworks have clarified that they want to empower consumers to exercise choice while simultaneously stimulating competition and innovation. Today, more than 60 countries have open banking solutions in place. However, the scope and type of services differ from country to country.
$131.5BN
raised by Fintech companies globally in 2021
5X
more investments in Fintech Intermediaries in Asia Pacific in 2021 compared to 2020
Leveraging efficiencies for growth Since their inception, open banking frameworks have penetrated numerous markets – catalyzed by either enabling government regulation or industry-led action. Open banking permits consumers and businesses to take control of both their financial data and their financial futures by facilitating accessible, convenient, and multichannel payment solutions. It also stimulates competition and innovation.
Sources: KoreFusion Anlaysis based on: Oliver Wyman, 11:FS, Tutuka, Andreesen Horowitz via iBanknet, Mckinsey, MIT Sloan, Rainmaking
How Fintech Intermediaries create value: Four KPIs to measure
Expounding on Open Banking capabilities Within the open banking framework and the implementation of APIs, financial institutions will be able to integrate new features and services by Fintechs or financial intermediaries more easily. They shorten product implementation cycles and enable banks to leverage external expertise as they consider new avenues for growth. This rapid delivery model can be of great value in commercial banking, where onboarding can often be a challenge, especially for smaller merchants. Similarly, super apps rely on small merchants to help widen their offerings beyond the big brands. The speed and operating efforts needed to verify entities, get them onboarded, and ensure transactions are processed securely can significantly impact success and profitability. There have been various use cases for open banking, which can be leveraged when building out merchant solutions. Globally, Mastercard's acquisition of open banking technology providers such as Finicity (U.S.) and Aiia (Europe) are with the intent to support our partners' vested interests in delivering on open banking capabilities in their respective markets. As part of its multi-rail strategy, Mastercard continues to advocate for innovation and enables its customers to launch new digital solutions that meet the needs of everyday work, life, and play. Aiia provides API connectivity to over 2,700 banks across Europe. It expanded Mastercard's open banking footprint into Europe, while its acquisition of Finicity Corp. in 2020 set the stage for its open banking initiatives in the U.S.
Lower Acquisition Costs
Faster Time To Market
Stronger Financial Performance
Higher Valuations
Lowers fully loaded average customer acquisition costs by up to 87%
Financial Services from zero to launch in as little as eight weeks
Raise ROA and ROE of partner financial institutions by two to four times
Financial Services revenue valued as high as 5x to 10x multiples
Instant merchant verification
Cashflow management
Security features
Enabling payment formats
Integration to platforms
Managed insights
Sources: 1. Vocalink Open Banking Monitor 2020; 2.CB Insights’ 2021 State of Venture Report, eMarketer.com ; 3. Oliver Wyman; 4. Finextra Jan 2022, Ayoconnect.id
An example of this is Ayoconnect. Ayoconnect is Indonesia's largest open finance platform and has already embedded more than 4,000 products with over 200 API customers. Ayoconnect demonstrates how an open finance ecosystem can power new finance experiences.
putting consumers in control
Headless solutions in the new frontier
The potential of API-ready commerce platforms is undeniable. Consumers expect brands to continually improve their customer experience journeys, requiring businesses’ infrastructure and models to adapt quickly. However, it takes considerable effort and time to dismantle connected operating systems to make improvements.
commerce in THE DIGIVERSE
'Always on' with ubiquitous commerce We already see an acceleration in information flows and transactions through the ecosystem. This flow will only get faster, more ubiquitous, more seamless, and beyond current ecosystems, such as the Metaverse. The Metaverse is the convergence of two ideas that have been around for many years: virtual reality and fully digital versions of our lives. The Metaverse promises users to blend the physical and digital worlds where we can bring ourselves and our assets – from fashion to art to entertainment – and truly immerse ourselves in the experience. If done right, the experience promises to transcend that of past cyber experiences and make the shift between the two worlds more seamless than ever before.
The Metaverse is still nascent and unexplored territory for most, and assessing its actual value will take time as new ecosystems develop. Brands like Amazon, Meta, and Tencent are experimenting with various aspects, ranging from advertising, gamification, and commerce. In the Metaverse, the goal is to build out digital sales without needing an interface or a device. Perhaps, this is what headless solutions can support in the future and extend digital selling capabilities to any touchpoint. We already see payment systems facilitated by tokenization, digital currencies, and wallets, which can enable greater integration. While companies have yet to define how they wish to interact and transact with consumers in the Metaverse, the potential via new tools to enable this exploration is available. As highlighted, there are super app players who have already started virtual capabilities but have yet to define their position in this space truly. Perhaps we can also expect new contenders to become the next go-to super app for this brave new world, particularly in the entertainment and gaming fields.
projected size of the global market for the Metaverse by 2026
$75BN
Sources: 1. Globenewswire.com, Feb 2022; 2. Simicart.com, Headless commerce examples; 3. Forbes.com; Why is Headless commerce getting 16bn in Funding; 4. Vtex.com, The race for super apps why companies aim to lead the way
Many retail brands are already using headless commerce to spearhead their eCommerce strategies:
Carnival Cruise Line, one of the world's largest travel-leisure agencies, also adopted headless commerce through Progressive Web Apps (PWAs) to deliver better mobile experiences. To respond to the challenge of slow page-loading coupled with patchy network coverage, they adopted a PWA-enabled store to improve booking flows and increase overall user engagement. The company could improve portions of the website over time without impacting the entire user experience.
This is where headless technologies come in. They separate an e-commerce application's front end and back end to enable easier implementation of new features. For instance, Progressive Web Apps (PWAs) correspond well with headless architecture. To respond to slow page-loading and patchy network coverage, a PWA-enabled store can initially load a static web page and then progressively swap out parts that need to change, resulting in nearly instant clicks between pages. Such solutions drastically simplify the integration of product improvements and new features without interrupting the customer journey and subsequent data flowPWAs are just one solution that brings the headless paradigm to life. Headless architecture also enables customizable interfaces that can speak to the specific customer set. They make personalization easier and more relevant for their intended audiences – through region-specific content, adapting the content for language differences, and delivering this content to different systems. At the same time, APIs can then take on the challenge of addressing back-end systems without hindering the customer experience – from logistics to inventory management and CRM subscriptions to payments. This flexibility can fuel the build-out of a given app's ecosystem and speed up the transition to super app status. Similarly, improvements can be implemented in stages on the back end without impacting what consumers experience on the front end. This ability to make ‘bite-sized’ improvements and consistently improve the overall app experience is a critical benefit of headless commerce. Headless solutions are cloud-native and API-first and let brands scale quickly and integrate smoothly with other systems for quicker upgrades.
Decoupling for greater flexibility This unique value proposition is why commerce platform enablers such as Shopify, VTEX, and CRM platforms like Salesforce have invested in headless technologies. They enable their customers to future-proof business models by adjusting to market challenges and implementing product improvements more seamlessly. Increasingly, up-and-coming headless platforms such as Fabric, Swell, and even complementary headless CMS solutions like Shogun and Strapi, are offering brands greater agility in building out the right customer experience.
Nike, for example, created their custom platform early on, powered by headless commerce, cloud-native technology, and microservices. This strategy has allowed Nike to accelerate its back-end capabilities much more quickly and reinforce its direct-to-consumer initiative to capture significant growth opportunities.
Being able to offer a multitude of solutions for consumers creates more touchpoints and points of entry to a brand. This capability also attracts different audiences at multiple stages, and prolongs the customer experience with the app. It truly brings the omnichannel strategy to life. Further, brands can centrally store customer experience content in a back-end engine and then use APIs to deliver the same content to a device or channel. Therefore, it is no surprise that brands of all sizes, and yes, even marketplaces, are broadening their offerings across various verticals to assume super app status. Headless solutions are contributing to this evolution of e-commerce on a wider spectrum.
in funding has been raised for headless technologies on the last two years
$1.65bn
OVER
content repository
back-end tools
Rigid | Bloated | Centralized
Flexible | Agile | Decentralized
Traditional Ecommerce
Headless Commerce
channel
front-end tools
channels
How exactly headless solutions will shape e-commerce – and beyond – is still being written. What is certain is that headless architecture helps companies respond to changing consumer needs more efficiently and future-proof their business model.
explores the technology and trends shaping the evolution of commerce in today’s digital-first world.
Whether consumers worldwide will choose super apps for all their service needs or not, APIs will still support the integration of additional features more efficiently and ensure orders are fulfilled seamlessly to the last mile. Perhaps, the super app model could dissipate, and consumers will interact with a series of embedded experiences to be fulfilled in various ways. Ultimately, embedded finance will be industry agnostic - companies of all types and levels of maturity can and will launch embedded financial services over time. Consumers' trust in the brands they interact with can also shape how Super apps evolve with time. With insights into their customers, apps can widen the variety and integration of services offered. This trust is built on permissioned data access and through the customer experience at every point of interaction. The aspiration of the digital bazaar of the future is not far off. While logistic specialists are still working out the complexities of bending time and space to address the challenge of immediacy, the quest to improve the consumer experience from discovery to purchase completion continues. Businesses will evolve to ensure a seamless journey in the physical world or beyond. Ultimately, consumers will decide what their 'pocket marketplace' will entail and what the quintessential digital commerce experience means for them.
For more information on these topics or other digital topics of interest, please contact Mastercard Foundry at: foundry@mastercard.com or your Mastercard account representative.
Mastercard Signals
Reshaping commerce with embedded finance
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THE FUTURE AWAITS
Appendices
Why Mastercard Developers
Support for every step
A tailored portfolio
Reaching your goals
With commerce changing faster than ever, a trusted partner can help unlock opportunity.
Mastercard Developers will be there to help you with a wide portfolio of products and services.
Our programs, platforms and services help deliver innovative technology, a wider network and accelerated growth.
We’ll help you sustainably push technical capabilities, find value-adding partnerships, and increase your revenue.
Source: FinExtra, Post-Covid Digital Strategy: Banking Customer Experience Trends of 2021.
70
%
of consumers expect new ways to get existing products and services
54
of consumers want expanded engagement methods
71
of consumers say businesses must change how they engage with society
As a fintech, the difference between challenge and opportunity is how you respond to change.
With commerce changing faster than ever, a trusted partner can help unlock opportunity by giving you:
• Flexibility • Scalability • Technology • Expertise
Mastercard Developers is our portfolio of solutions for the fintech space, providing a clear but flexible path to Mastercard’s assets, partners and programs. Whether you’re building your infrastructure, launching new products, or growing your brand and business—it’s designed to put you on the path to success.
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API NETWORK
APIs support integration of solutions to increase customer satisfaction e.g. helpdesk support, live chat, CRM, etc.
Businesses can embed payment solutions more easily within app environment
Marketplaces can connect with brands’ inventory systems to initiate the sales order
Engaging logistics companies to ensure delivery of purchased items to their customers more easily
1 coloumn of services providers on one side and whole bunch of APIS ... and showcasing the super app and then connecting to cusotomers
Just as API-ready platforms support the rollout of new features and services in the open banking or BaaS spaces, there are also solutions focused on getting brands up and ready for e-commerce more quickly. These platforms intentionally separate an e-commerce application's front and back end to enable companies to set up their systems more rapidly and flexibly. An API focusing on backend systems can be called out for any task, from logistics and inventory management and CRM subscriptions to payment transactions. Known as headless commerce, this intentional decoupling allows companies to focus on what represents the brand the most - content management – while ensuring they do not lose sight of the complete customer experience. Headless solutions are cloud-native and API-first and let brands scale quickly and integrate smoothly with other systems for quicker upgrades.
commerce in THE METAVERSE
Nike, for example, created their custom platform early on, powered by headless commerce, cloud-native technology, and microservices. This strategy has allowed Nike to accelerate its backend capabilities much more quickly and to reinforce its direct-to-consumer initiative to capture significant growth opportunities.
Sources: 1. Globenewswire.com, Feb 2022; 2. Simicart.com, Headless commerce examples
The App Revolution
Makings of a Super App
An Embedded Commerce Experience
Key Drivers for enabling Super Apps
Raising the Bar with APIs
Putting Consumers in Control
Commerce in the Metaverse
The Future Awaits
Carnival Cruise Line, one of the world's largest travel-leisure agencies, also adopted headless commerce through Progressive Web Apps (PWAs) to deliver better mobile experiences. To respond to the challenge of slow page-loading coupled with patchy network coverage, a PWA-enabled store first loads a static web page and progressively swaps out parts of the site that need to change, resulting in nearly instant clicks between pages. This move has helped improve booking flows and increase overall user engagement.
Idea is to have 4 columns, services providers on 1 side, linked to 3-4 APIs, and then APIs connect them to the single Super app, and on the rright side of the super app are the customers . This is like a super rough sketch I drew it out on PPT cos it's easier .but if you can find a way to make it more orderly that's good too!
