Lydia — a mobile payment app redesign
By: Handa Cheng
Tags: Redesign, Lydia, UX Design, Figma, Mobile Payments

Research

I use Lydia since 2016 but at a very random frequency, so I decided to reach out to 12 friends individually to know how they use the app. More specifically, I would like to know :

- What motivates them to use Lydia?

- How much do they know about Lydia’s new features?

- Would they be ready to pay with their phone?

You can find details of all interviews here (in French), below my key findings.

New features remain largely unknown

Most interviewees use only one feature on Lydia : pay and receive money from friends. Only 3 people claims they have used Lydia for other purposes (mobile payment and money pot), even among some power users.

Features available on Lydia as Feb 2019

2. Most interviewees admit they just use the first 2 tabs (out of 4) in Lydia (send money and see transactions). While simplicity is praised by users — one even called Lydia’s homepage as no-brainer -the more right you go in the app, the more cluttered it seems to be. Some features are so hidden that they are hard to find.

The last tab is a mix of new features + old features + settings

New features are struggling for monetization

1) The new value proposition is still fuzzy.

While the use case of Lydia has been straightforward so far, I didn’t get what “MetaBank”, aka their new tagline, means at first. Sure the app has been adding a lot of banking related features (instant loan, joint account) since last year so it’s clearly going to a direction where it tries to combine common banking services — without being a bank — and an universal payment solution by integrating every existing payment option. But all these features are also confusing and add complexity to the product.

Lydia website homepage as Feb 2019

2) People are not seeing enough value in Lydia premium.

I have no idea about their paid users / free users ratio, but I’m still quite surprised that out of my 12 friends, only 3 know the offer, 1 actually tried it (when it was free) and no one said he/she is willing to pay for Lydia premium. The main reason is most premium features are already fulfilled by their (mobile) banks for free and the remaining are not essential. No “wow” feature worthing the price, even at 2,99€/month. As a user of N26 myself, I couldn’t agree more.

The Lydia premium page is not selling the “right” features

The need to build trust beyond friends

Lydia is still associated to small amounts between friends.

The good word of mouth remains key for Lydia to sustain its rapid growth. But the trust needed to use Lydia (send money to friends) is pretty low because 1) you know who you are sending money and how it works (you have either received money before or been asked to send money by friends) 2) the risk is low because the average exchanged amount is pretty small. But when it comes to a higher amount (let’s say > 100€), several interviewees mentioned they prefer to use their bank cards because Lydia is “not a bank after all, if something wrong should happen, I wouldn’t be confident”.

Showing off my drawing talent

2) People don’t keep (big) money on Lydia. To pay with Lydia, you can use your money on Lydia (for most people, it’s money they’ve received from other Lydia users) or from your linked debit card. Out of 12, only 1 interviewee says he is comfortable to have a Lydia balance > 100€, while most people say they would transfer any money > 50€ from Lydia balance to their bank account because there are no clear benefits to leave money in the app: the Lydia balance does not make money (interest), makes your purchases cheaper (incentives) or more convenient.

WeChat Pay generates interest for money your keep in their wallet

3) Random frequency, unless used as a payment solution

Reimbursing friends is an useful but a sporadic use case. Most interviewees use Lydia 2 or 3 times a month. Some power users can go up to 2–3 time a week on average. Still, there is not regularity.

But 2 persons mentioned something interesting: they used to use Lydia QR code payment several times a week to pay their groceries at Franprix (a grocery store chain) and claimed they would use elsewhere if possible (Franprix is the only name mentioned). High frequency & low amount use cases like supermarkets are actually a good way to create new payment habits.

Ok, let’s recap :