Super apps & beyond: How fintech will evolve in the next 5 years

Super apps & beyond: How fintech will evolve in the next 5 years
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In this edition of the Zendrive Expert Spotlight Q&A series, we sat down with Ali Masoudi, Senior Product Manager at Venmo, to understand his perspective of the biggest challenges facing the fintech industry, the trends he’s most excited about (think: “super apps”), huge potential partnerships and integrations in the space and the importance of creating these valuable ecosystems, and where we’re headed in the next 3-5 years. 

Coming from the product team of one of the most influential and innovative fintech giants in the US today, here’s what Ali had to say.

*Disclaimer: Ali's opinions are his own and do not represent those of Venmo.

1. Introduce yourself briefly. What do you do at Venmo? 

Ali Masoudi: Venmo is a product-oriented organization in which product managers lead various product pillars such as P2P, Commerce, and Credit, to name a few. My product team, Shared Services Product, empowers all these products in the backend with Platform, Payments Processing, Disputes, and Money Movement. On this team, I currently lead the Venmo Disputes Product. 

My role is to make sure the Venmo disputes product is bringing value to our customers including consumers and businesses, through collaboration with engineering and business stakeholders. On my team, we’ve been working on several product initiatives; some have been purely dispute-oriented, while others are to support new products and features rolled out by other product teams through the design and development of dispute processes and functionalities. 
As a product manager, I’m working closely with the engineering team as well as other business stakeholders across Venmo and Paypal in order to drive those initiatives.

2. As a product leader in fintech, what are the biggest challenges or problems you face?

AM: I think there are different types of challenges. One, consumers are looking for convenience and less expensive products. When it comes to payments, consumers want to move funds for free and fast. They aren’t expecting to pay any sort of fee to move money between friends and family, specifically. That’s one thing that’s pressuring fintech companies – they need to come up with different ways to offer valuable free services, as much as possible. At the same time, they have to monetize their business. They can’t offer everything for free and also be profitable.

I think this type of fee structure and the need to monetize is something that I can tell you for sure is pressing a lot of fintech companies.

When there are 1-2 companies that have a monopoly, there’s not a big problem, but when you see a lot of market players out there trying to offer similar services, then it becomes very competitive for fintechs to come up with new features and free services.

Another thing I’ve noticed is that the US is generally behind many countries in Europe and Korea and Japan when it comes to money movement. In those countries, in a lot of cases, you can send money in real-time to friends and family. 

In the US, we have a Real-Time Payments (RTP) network. Based on the reports, only 50% of financial institutions participate in this network, so it’s not widely adopted yet. We still have the ACH payments network that moves money within 2-3 business days. For example, if I pay for my loan, it will take 2-3 days to see that my payment is posted on my loan or that my bank account gets debited. Starting in the past 2-3 years, many banks and institutions are getting pressure from consumers to move money in real time and help them pay bills in real-time. That’s motivating the Federal Reserve to work on real-time payments, known as FedNow, particularly to connect small and medium-sized banks to the real-time payments network. That’s another thing that’s really pressing fintech – I know a few startups that are trying to solve this real-time money movement problem and disrupting the space a bit.

3. What are you really most excited about when it comes to what will happen in the next 3-5 years in fintech, specifically as companies continue to address these key challenges?

AM: I’m excited about the concept of “super apps,” something that companies like PayPal and other big tech giants are working on right now. Basically, that means bringing multiple services – like payments from Venmo and Paypal – and other services from other financial companies into one app. 

In a “super app,” consumers won’t need to switch apps to get different tasks done. This will offer as many services as possible to keep it simple and seamless for them, all on one platform. 

In my view, this concept of the super app will take a few years to mature but I know we’ll get there with all the advances in technologies, and as consumers continue to embrace digital payments.

4. That’s very interesting. What types of services, if any, do you think could be included in these super apps, beyond financial services?

AM: One example of these types of services could be in the real estate realm, helping consumers pay their mortgage or rental payments directly from their app. That’s a huge payments market in my opinion, and this is a type of service that I haven’t really seen done well in some of these payments apps and I believe it’s an untapped market. 

In addition to payments, I think fintechs could enter into the fundraising space. This could be for any social event to raise money for a specific cause. I’d love to see this type of feature or capability in payments apps or at similar fintech companies, where consumers and businesses both can easily start fundraising campaigns directly within these apps. 

5. Are there any current or future partnerships within fintech, between fintech companies and players in other industries, that you think are particularly interesting? 

AM: I would go back to my previous example around super apps – if a payments app offered mortgage payments through their app, then of course they’d need to partner and integrate with various key players in the mortgage sector such as mortgage servicers, insurance, and so forth. Most of these mortgage companies, in my opinion, have legacy systems – so more fintech companies may have an opportunity to come into this space and create a new infrastructure for integration. I should mention that in the past two years there have been a considerable number of fintech disrupting this PropTech space. 

I also think the gig economy will help improve integrations between companies. Instacart, Doordash, etc. – it would be great to use a payment app such as Venmo for these types of services, integrated directly into their apps. These are the integrations that I think have a lot of potential and create new opportunities not only for fintech, but also for these gig economy companies that are looking to expand their audiences through integrating with payments apps that have massive user bases, such as Venmo. That will open a lot of doors for these gig economy companies to grow their audiences.

5. What are some of the ways fintechs are approaching the monetization challenge that you mentioned earlier? 

AM: What we’ve seen recently are the “buy now, pay later” features that I think are still in the early phases of development. That is mostly in the consumer space, but I don’t really see it that much in the B2B space. I think that has huge potential - creating revenue streams for fintechs, and for businesses like those in construction that have a lot of contractors and suppliers, and that aren’t really paying in a seamless, digital way.

So contractors for construction projects can offer these types of services to their clients. I have seen companies starting to come into this space, but it’s not as big as the B2C side yet. 

6. Can you comment on where we are now in the fintech world with data security & privacy? 

AM: I think it’s definitely better than it used to be. These days consumers trust fintech apps more than before. There’s still a lot of fraud, however, so consumers still have concerns. Money is a sensitive subject for many consumers and businesses – even if someone steals your mobile device and just makes a $10 fraudulent transaction, it’s still sensitive. 

Companies are working on strengthening data security by, for example, getting rid of the standard password and username and using other login credentials like fingerprints, etc. They are trying to come up with new ways to increase security. In general, we are in better shape than we were 5 years ago, but it’s still an important topic and companies still need to improve upon data security. 

7. How are fintechs today thinking about approaching challenges with customer acquisition and retention? 

AM: Fintech companies approach customer acquisition and retention differently. Some organize lots of marketing campaigns in person or online and some are more organic like Venmo. Even we at Venmo have marketing campaigns for consumers and businesses. For instance, we recently introduced a new program for emerging and small businesses that will provide financial grants ($10k) and mentorship services to 20 new and existing Venmo Business Profile customers. 

On the consumer side, we have many marketing activities as well such as events, gifts, webinars, and so forth. However, over the years, Venmo has had a lot of organic growth on the consumer side.

8. Is there anything that I should have asked you about that I didn’t already ask? 

AM: I’d like to add that there was a recent video that came out from a VC firm that suggested that every company would turn into a fintech. In a way, I feel like they’re on to something – look at Apple, for example, and Google, both offering different types of financial services. 

Many tech companies are trying to come into this space, even ones you’d never imagine. So clearly, there will be more competition in fintech, but I think it’s really good for consumers as they’ll get access to better services.

More and more non-financial companies will offer financial services in the future, and that will be very interesting.

Curious about Zendrive and how we help fintechs and other consumer apps with our IQL solution? Learn more

Super apps & beyond: How fintech will evolve in the next 5 years
Meara Hamidiani
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