PayPal CEO Dan Schulman thinks there are too many financial apps. So he wants to build a "super app" for consumers to manage payments, shopping, savings, investing, budgeting, crypto and identity — all in one place.
It's an ambitious undertaking still years away from actual fruition. It also highlights the multi-dimensional battle that's only just emerging between banks, fintech players like Affirm, PayPal, Square and Stripe, as well as big tech companies like Google and Apple. All these players want to be the go-to provider for consumers' finances.
Schulman believes that consumers only want to use eight to 10 apps, and that the rest are going to be essentially superseded by super apps. In China, Alipay has become known for its wide range of services.
"What a super app wants to do is turn all of those separate apps into a connected ecosystem where you can streamline and control data and information between those apps, between the act of shopping, the act of paying for that," Schulman said. "And then you have this common platform and common data that allows machine learning and artificial intelligence to kick in and give personalized recommendations to those consumers."
Schulman's vision, which he is laying out Thursday at PayPal's investor day, includes three major areas: payments, shopping and financial services.
This mega app needs to include a range of digital payments offerings, both online and offline, Schulman said, which need to be easily connected across merchants. This includes "not just any financial institution, credit card, debit card, ACH, but we'll also include things like rewards points redemption, utilizing cryptocurrency as a funding instrument, utilizing central bank issued digital currencies, when that becomes a reality."
Since payments are PayPal's historical strength, this is one area it could have some advantages against competitors. But Apple Pay and Google Pay have their own locked-in user bases on mobile devices, and Square has its Cash App.
For financial services, PayPal intends to partner, but Schulman said it would still be a "seamless PayPal experience," though some products could be built internally. Expect this offering to include services such as high-yield savings accounts, direct deposit, check-cashing and investing. Here PayPal faces intense competition from banks that natively offer financial services plus their own budgeting tools, not to mention aggregators such as Mint and Personal Capital, and startups offering savings tools.
"Because if somebody is going to be putting their money onto our platform, we want them to be able to grow that money, to invest that money in not just things like crypto, but in individual stocks and other assets that we digitize and allow people to invest in," he said.
While Schulman didn't delineate how PayPal would partner on this, there are a number of banking-as-a-service providers and brokerage-as-a-service companies that offer these types of white-labeled services. In this new fintech world, all sorts of companies can turn on these kinds of financial services, so PayPal's competitors could also make similar moves, giving consumers choice of where to get them.
There will be other facets to the app over time, too. Bill payment, subscription management and tools to help consumers with budgeting are also part of the mix, Schulman said.
With shopping, Schulman wants to provide "contextual commerce" by targeting consumers based on things like their wish lists with personalized offers and deals. This could include price monitoring and rewards. The goal is "so that you don't, as a consumer, need to go from one website to another and figure out different payment instruments, but you can do everything from one."
In this market, PayPal is facing not just Amazon and Shopify, but also "buy now, pay later" companies like Affirm and Klarna, which have honed their offerings over years operating in the sector.
And that raises the big question hanging over these kinds of super apps: Which companies are really capable of delivering all these services in a single product, in a way that consumers trust with their financial data and to manage their financial lives? PayPal hopes it's one of them, but it will be years before we know if that's true.