Tapping Superplatforms to Further Economic Growth & Financial Inclusion
By admin February 16, 2018

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Superplatforms, the “Platforms of Platforms”

Experts have claimed that banks are decaying, but they have persisted over time. However, the entrance of new internet “superplatforms” into financial services may be the end for some traditional financial institutions.


Superplatforms are successful and regularly recognized on lists of the world’s most innovative and client-centered companies. Major superplatform players, such as the United States’ Amazon, Google, and Microsoft, and China’s Alibaba and Ant Financial, create profound implications for the future of global financial inclusion, because their business models differ from financial service providers that have gone before them.


MasterCard Foundation’s Fibr report states that among the large internet companies are superplatforms or “platforms of platforms” that operate across multiple sectors. What makes a superplatform “super” is not its size alone, but rather its presence across sectors. Facebook, for example, dominates social networking and instant messaging (outside of China), but also runs a massive online news aggregation service.


The Reach

Superplatforms support a two-way flow, enabling users to be both users and sellers of goods and services. The superplatforms recognize the importance of extending this cross-sector dominance, unlike traditional financial institutions. The Alibaba Group, China’s largest e-commerce provider, founded Alipay in 2004 to enable payments for its e-commerce model. Today, it is one of the most widely used retain payment systems in the world.


Having achieved domestic dominance, the superplatforms are now turning their attention globally. The founder of Alibaba, Jack Ma, captured public attention by announcing the platform’s goal of becoming the world’s fifth-largest economy in the next 20 years; serving 2 billion customers globally, creating 100 million job opportunities, and enabling 10 million businesses. In Africa, Alipay became available to Chinese tourists in South Africa in 2017, and Ma’s visit to Kenya in July of 2017 was accompanied by speculation that further rollout on the continent would follow, according to Consultative Group to Assist the Poor.


In 2014, Alipay was spun-off into the wider financial service group Ant Financial and is now one of the world’s most valuable unlisted financial technology (fintech) companies. Ant’s direct financial offerings include the world’s largest money market fund, Y’ebao, as well as the wide Ant Fortune marketplace through which Ant’s customers can seamlessly access hundreds of other fund offerings.


Impacts of Superplatforms

Superplatforms entering the African markets will have significant implications for consumers at all income levels, as well as for financial institutions and regulators. For consumers, low and medium income alike, are exposed to and using a range of new technology innovations.


However, deployments today of fintech innovations are often uneven. According to MasterCard Foundation’s Fibr report, the entry of superplatforms could integrate these innovations into a larger, more compelling, and affordable offering. A key appeal of superplatforms for low-income consumers may be ability to buy and sell goods and services through the platforms. Additionally, these new markets would have access to numerous forms of funding, wealth management, and advertising channels that have traditionally been disjointed amongst numerous financial institutions and alternative platforms.


In essence, superplatforms do not offer financial services as the essential entry product, but serve as an enabler for other desirable things. Of course, these engagements generate a data record that may help make users worthy of traditional credit, or they may lead to another service like “bite-sized” insurance. As such, superplatforms may be able to deliver financial inclusion and generate economic growth in developing areas in a way that traditional financial providers have not.


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