If you are someone who has shared expenses with a bunch of people, it’s highly likely you are already using Splitwise.
The idea is very simple, you go out, you buy a round of drinks for 6 people, say £5 pounds each. Everyone owes you 5 bucks which might not sound like a lot, but it’s 30 out of your pocket. Depending on how well you know them, there can be some awkwardness in asking for your own money, keeping track of this is a task!
This is what Splitwise solves, in their founders’ words -
Splitwise's mission is to reduce the stress and awkwardness that money places on relationships.
So with Splitwise, you go out, just tap tap tap and add add add, you don’t need to keep track of who paid what and who owes what. Open the app, and simplify debts so that you have to make minimum transactions to get even in the group.
Simple things always work like a charm. As long as you have shared expenses, this app isn’t going anywhere. You’ll urge your friends to download the app before you can manage the expenses, solving for acquisition.
But you see, the problem with Splitwise is that the free version of the app pretty much offers everything one might need killing the incentive to move to premium. Ask yourself, are you paying for its premium version? Probably, Not.
Here we’ll try to brainstorm on what Splitwise can do to bolster its offerings and why that will work.
Let’s get to know the app better
Who uses this app?
To answer this, we need to ask ourselves, who has the most shared expenses? People who are spending time together - Couples, students, people in shared accommodations, small informal businesses, people who go out occasionally, the list goes on.
Furthermore, users would be localized, you’d ask your friends to install this app and guess where your friends are most likely to live? Somewhere near you. This is important and advantageous and we’ll use this later.
What are they using it for?
Broadly, all the expenses on Splitwise can be classified into the following 3 categories -
Recurring Expenses - Rents, bills, groceries, eating out with your partner, subscriptions, etc. Frequent users; power users; most likely to convert to premium.
Infrequent - These are once-in-a-while expenses, you go out with a particular group of people who use Splitwise etc. These are our acquisition drivers since these expenses will urge people to install the app.
And how are they making money currently?
Ads for free users, though very sparse, you probably wouldn't have noticed
Payment Wallet they are building called Splitwise Pay
Splitwise Pro - The premium version of the app which offers
Analytics - to understand your spending behaviour
Expense Search - to figure out how much and when you spent on a particular recurring item say coffee or shared cabs in a month (and feel bad about your iced coffee addiction xD)
OCR capabilities - to save time by simply scanning a receipt to get a list of all items and then assigning these items so everyone pays for only what they had, simple. Especially useful in Western culture where people pay for what they eat.
Currency conversion - You went on a trip, paid in euros but now want to settle up in pounds so it’s a quick way. It’s also useful for expats like me.
3 Bets Set to Amplify Splitwise’s Offerings!
Improved Monetization💰
More money can be made in either of these 2 ways
Make more people buy Splitwise's premium
Find new ways to make money
First, we need to ask ourselves, why would someone buy Splitwise premium?
If they can save more time with the premium in managing expenses than with the free plan. Ex - current OCR capabilities.
If they can save more money with the premium features. Ex - current analytics which can help get a better understanding of their expenses to improve them.
This tells broadly what we need to do, now let’s think about how can we improve Splitwise premium’s value add.
Can we think of some way to save time in the way users log their expenses? If it would be possible to get a list of expenses made in a particular time period and select the ones you’d want to split with others, that’d be pretty neat. A lot of personal expense management apps do this where they integrate with your bank apps or read SMS to get information for your spending.
If we can provide them the value to understand their overall spending habits which would mean managing your shared as well as personal expenses followed by in-depth analytics, similar to what most personal expense management apps offer, that’d paint a holistic picture of the expenses of a user. You are doing part of your work here already, why not all of it?
If we can forecast their expenses so that they can proactively handle their upcoming expenses, budget accordingly and avoid unnecessary ones we can help save them money, especially for the recurring users.
What can Splitwise do to open new monetization opportunities?
To answer that we need to understand what they have currently that they can leverage?
A place where they tell you roughly what they are spending on
Who they are spending with
When they are spending it
How often do they spend
All this spending habit data can make up for a good recommendation engine for coupons. Couple that with a forecast on spending habits, and you know exactly when to show these too.
An Indian brand CRED nailed this play. They’ve created a club of well-off individuals in India by allowing them to pay credit card bills through their app to bring users and opening this segment of high spenders to D2C brands and businesses by having a section for availing offers with CRED coins received on performing app actions.
You see young D2C brands want awareness and have high margins, a £20 MRP product can be bought at a 20% discount with say 100 split-coins, this 20% margin comes from the fees charged by D2C brand for listing the product, nothing out of Splitwise’s pocket. Since most D2C products have high margins, it does not hurt D2C companies as well.
Remember how we discussed that the users are localized, this can serve as a huge advantage in launching such features in particular areas with a high density of users and easily partnering with local D2C brands.
Having such a space can also solve another upcoming problem for Splitwise Pay which is increasing the number of payments made through Splitwise wallet in the US by encouraging in-app payments with split-coins.
I am not sure why they’ve not done this already. Splitwise considered this back in October 2012 as per their feedback portal but didn’t work on it.
Focus on simplifying the UI📱
I am not a UI expert, but let’s try to do a small run-through of the app by asking ourselves some questions (first principles for the win)
Why do you open the app? One of two actions, add an expense or see how much you need to pay. Once you have done any of the above, the next thing you’d want to do is clear your dues.
So this answers, What would you want to see once you open the app? A place to add expenses and an overview of how much you need to pay. No one likes numbers being bombarded with numbers. Minimal information overload.
What is the primary thing you want to see? How much do I owe in total, this is where we’d want to gather users’ attention. The idea would be to really highlight this number. Something they’ve updated in the iOS version, hopefully soon in Android as well.
What next would you want to know? Who do I owe this? For any expense be it group or individual, you’ll be getting the money/paying to an individual so the amount per individual details.
What next would you to know? When you think about whom you owe, you’d probably want to look at the title of the expense to jog your memory and the date, so this will be second-order information.
We can abstract this information to the second screen while keeping our first screen with minimal information on just how much you owe in total across all groups and individually in each group. Currently, the app displays this on the first and second screens both.
Nudges⏱️
This is something which would really help those who find it hard to ask for small amounts of money back. (Yes I am designing this feature for me xD)
Often when we go out with a group of people we don’t know really well, it can be hard to ask for your money back. If the amount is small it can be hard to ask that back but 5 people owing £10 is £50 out of your pocket remember?
Nudges, where you can nudge users for Splitwise to send an anonymous generic reminder notification to clear the dues left with a person. Also, a perfect feature to be put behind a premium paywall.
Thanks for reading this, it means a lot to me that you made it here. Let me know what you think about this in the comments. Any feedback? Feel free to reach out to me, here’s my LinkedIn
That's very well explained!!
So informative!!