Tomorrow’s financial apps might not be the ones you think


Apps are increasingly relying on their own in-app currency to generate revenue from user-to-user transactions. In our previous blog, we analysed Bigo Live; a streaming app with 23m monthly active users (MAU). Bigo users purchase Diamonds via an in-app purchase mechanism and then use these Diamonds to purchase virtual gifts which they send to broadcasters during a live stream. These broadcasters then convert these virtual gifts back into cash. The process is very complicated and intransparent as Bigo is not a licensed financial company. If one initially spends US$100, the broadcaster is only able to cash out about US$15. A big chunk of fees are also eaten up by Apple/Google (30%). However, the opportunity for content creators to directly earn from their fanbase is a win-win, as well as increasing stickiness between an app and their users.

Bigo is not alone, other streaming apps are gradually moving towards their own in-app “currency” system to unlock engagement and monetisation opportunities from small-value user-to-user payments.

AppDescriptionMAUIn-App “Currency”Revenue (2020)
Bigo LiveSocial live streaming23mDiamonds, BeansUS$ 150m
TwitchLive streaming for gamers140mBitsUS$ 2 billion
KuaishouVideo sharing776mKwaicoinUS$ 8 billion
Omlet ArcadeMobile gaming and live streaming11mOmlet TokensUS$ 6.3m
Spoon RadioAudio live streaming2.2mSpoon CoinsUS$ 72m

Monetising from relationships between content creators and their worldwide audience is a game-changer if done correctly. Let’s take a closer look at Twitch, the largest streaming app for gamers: Forbes recently cited that Twitch accounted for 1.7 billion hours of content watched… just for the month of November 2020.

“This growth, along with new expanded live streaming capabilities across social platforms, allows brands to capitalise on endless monetization opportunities.”

Forbes, 4 Feb 2021

In fact, Twitch was growing at an astounding 175% in Q2 of 2020, along with 7.5 billion hours of content watched in Q3. What has been very exciting to observe is Twitch’s most recent move towards their own currency, “Bits”. One can begin to ponder – “Why don’t they just use PayPal or one of the many e-wallets out there?” One aspect is that PayPal would take complete ownership of Twitch’s users and their data as users would be required to create their own account with PayPal, leaving Twitch with very little influence over the future development of that “financial” relationship. Then, there is the aspect of convenience, which is paramount when it comes to context-based payments of small value. If a user’s balances were stored on PayPal, the user would have to leave Twitch during a live stream and open the PayPal app in order to transact. This is simply too much hassle to send someone a $1 tip. Creating an own in-app currency solves this convenience challenge and makes it super simple for the app to monetise during user-to-user engagement.

Now, if a user buys 100 Bits on Twitch (for US$1.36), and sends these Bits to a content creator that withdraws it immediately; the content creator will get around US$1 – 40% revenue for Twitch. Impressively, US$ 30m worth of Bits were purchased within 10 months after its launch; leaving Twitch with an astonishing US$ 14m in additional revenue along with a promising growth trajectory.


The process of topping up Bits include a PayPal account – this can get very complicated; especially for people who don’t own a credit card to top-up their PayPal account.

Paypal does not accept top-ups via cash or local e-wallets. The whole process is still quite complicated – however, Twitch is not the only example. Companies like Spoon, Hyperconnect, Kuaishou, and Omlet all have implemented their own currencies as a strategic move to financially engage their users and monetise from their small-value user-to-user transfers. All of these apps have to solve the top-up and withdrawal challenges in their own ways – eventually compromising on scalability and revenue potential.

Here is what it means for users on Spoon Radio – an audio live streaming app. Spoon created their own “Spoon coins”. Yet, in order to get Spoon coins, one must set up a Payoneer account, send money to Payoneer, send money from your Payoneer account to top-up Spoon coins, and then finally send Spoon coins to a content creator (that of course needs a Payoneer account as well). Aside from the time-lag till one can use the funds earned, this process is a sure-fire way to cause headaches and a long list of customer complaints.

Kuaishou is another great example of a streaming app that is moving even further ahead of Twitch and Spoon. Kuaishou is a Chinese video-sharing platform (similar to TikTok). The platform previously allowed users to pay for their services & in-app currency using third-party payment systems like WeChat Pay and Alipay. However, they recently acquired Easylink Payment and are currently in the works of venturing into the payment ecosystem by getting their own license!

In an interview with KrASIA, market research firm iResearch’s analyst Zhang Yu explained Kuaishou’s acquisition of Easylink:

“The cost for Kuaishou to push an online payment option within its own business could be very high since the change of a payment option involves extra efforts, such as linking one’s debit or credit cards to the specific payment option.”

Despite these risks – Kuaishou still aims to create its own payment system within its own ecosystem. However, this would also turn Kuaishou into a regulated company which comes with a completely new set of challenges. Well-funded platforms may be able to cope with this, but for most apps it isn’t appealing to become a licensed and regulated financial services company.

Streaming apps left and right are looking for ways for their users to store value within them. But the complexity arising from different regulations in every country, varying degrees of financial inclusion amongst their users, and operational overhead – most apps are choosing their own in-app currencies. The problem is that it makes “cashing out” very complex if not impossible and it restricts further financial engagements of their users in the long-term. A proper in-app wallet with regulatory compliance would be a game-changer, and could make a streaming app part of anyone’s financial life without compromising on the core product.

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