Will Twitter, PayPal and Walmart compete to launch America’s super app?

Who has the best odds of winning?

Ever since Elon Musk’s “be careful what you wish for” acquisition of Twitter, speculation about America’s first homegrown “super app” has soared.

In October, Musk tweeted: “Buying Twitter is an accelerant to creating X, the everything app.” According to Ark Invest founder Cathie Wood, Musk is “thinking about a super app like WeChat Pay.” Keep in mind that Musk founded X.Com and merged it with Confinity to create PayPal.

For context, China’s WeChat launched as a messaging service in 2011 and has since become a combination of Meta, Apple Pay, Venmo, Amazon, Uber, Robinhood, Rocket Mortgage, Kayak and Healthcare.gov — as well as more than 3.5 million partner “mini programs” that operate inside the app. PayPal and Walmart have been teasing their own versions of financial super apps since at least September 2021 but with much less fanfare.

Twitter, PayPal and Walmart could find themselves competing to monetize the financial lives of millions of people. That raises several questions: Why is now the moment for super apps in the West? How should we assess progress toward a super app? How are Twitter, PayPal and Walmart chasing this idea? Which one has the best odds of winning, or is there actually room for several leaders?

Why now?

Though popular throughout Asia, Latin America and Africa, super apps have failed to materialize in the U.S. and Europe. If Twitter, PayPal and Walmart are going to change that, we must ask why.

The benchmark of a fintech super app is how much financial activity it can concentrate into one ecosystem.

“Super apps took hold in Asia because Asian consumers owned under-powered smartphones that weren’t conducive to managing 40 to 50 separate apps,” according to Ron Shevlin, chief research officer at Cornerstone Advisors. In the U.S. and Europe, smartphones didn’t have the power or memory challenges typical of the hardware in less developed regions, so super apps were never a necessity.

Moreover, as Axios argues, data privacy fears, strict banking regulations, and Apple and Alphabet’s control over payments in their mobile operating systems have deterred would-be super apps.

A super app doesn’t solve an obvious problem for the Western consumer besides providing convenience and security (both debatable). That said, you could argue that such an app could bring finance, banking and credit-building opportunities to the underbanked or unbanked, who may be either excluded from mainstream financial services or fearful of them.

So why now?

Twitter has lost the digital advertising field to Alphabet, Meta and Amazon. PayPal is overdependent on payment processing, which is increasingly a crowded, competitive space. Walmart, always a step behind Amazon in digital, is overdue to try something its Seattle rival hasn’t tried.

Super apps represent a fresh and new pasture for these behemoths.

The process

Twitter, PayPal and Walmart each have elements of a fintech super app or plans to create them. Their technologies span social networking, banking, payments, financial services, merchant services, e-commerce and advertising.

The categories and features of a super app can vary widely. To assess which company is best positioned to win, however, we need a framework for a super app to arise:

Build a massive, engaged user base

Walmart sees 230 million visitors every week at its global retail stores, up to 100 million unique monthly visitors to Walmart.com, and has some 11 million Walmart+ members. PayPal has north of 420 million active users, but it doesn’t give them a reason to hang out at PayPal itself — a weakness. Twitter hosts conversations (a generous term, I know) for 450 million active monthly users.

Convince users to bank and pay through the app

PayPal is accepted at millions of online stores and has launched savings accounts (via a partner bank), payment cards, bill pay, in-app shopping, deals and rewards, direct deposit for paychecks, buy now, pay later (BNPL), crypto trading and more. But why would anyone drop JPMorgan for PayPal banking when they can still link outside bank accounts, cards and reward schemes to PayPal?

Walmart, with its forthcoming neo-bank, ONE, should resonate with the 4.5% of American households that are unbanked and the 14.1% that are underbanked (i.e., reliant on “alternative” services like payday loans and check cashing). ONE will not charge monthly fees, does not require account minimums and promises $200 in overdraft protection, free of charge.

As for Twitter, Musk has said payment processing, high-yield savings accounts and debits cards are coming.

Bring merchants into your super app ecosystem

Walmart has a strong value proposition with its retail stores, online marketplace, fulfillment services and retail media network. PayPal offers everything businesses need to accept payments in addition to working capital and business loans. Twitter has a significant network of advertisers and the opportunity to earn payment revenue through Twitter Shopping.

The point of a super app is to monetize both sides of a transaction while amassing financial data. With that data, the app can train AI and machine learning to personalize e-commerce deals, credit card offers, loans, mortgages, insurance recommendations, wealth management and more. That should scare banks a bit.

Aggregate or build

If PayPal becomes a super app, it’ll mostly be via acquisitions. In the last five years, it has picked up Paidy (BNPL), Happy Returns (product returns), Curv (crypto), Honey (coupons), Hyperwallet (accounts payable), Zettle (point of sale) and Jetlore (predictive marketing), amongst other companies.

Walmart’s recent acquisitions do not scream super app, but its recruiting efforts do. Walmart’s CFO, John David Rainey, joined the company from PayPal in April 2022. The retailer also lured Omer Ismail, former head of Goldman Sachs’ consumer-banking unit Marcus, to lead ONE as CEO. Moreover, ONE’s leadership bench is stacked with people from Goldman, Capital One, Afterpay, Apple, Citi, Lyft and Google.

As for Twitter, there’s no telling what Musk will do. But if Tesla and SpaceX are any indication, he can assemble an A-team to deliver his vision. Whether Twitter has the runway to accomplish these ambitious plans is yet to be determined.

Curb your expectations

The benchmark of a fintech super app is how much financial activity it can concentrate into one ecosystem. By that standard, PayPal is leading, and Walmart has the most untapped potential. Twitter has an engaged audience and a loud, wealthy and experienced owner with vision — that counts for something.

However, don’t expect an American super app with WeChat powers anytime soon. At best, expect PayPal, Walmart and Twitter to float the term often in 2023 and maybe launch something deserving of the label.