Asia's Newest Mobile Wallet May Get the Region to Go Cashless, Finally
People in Asia are about to get an easier and quicker way to send money to a friend, via a mobile wallet app.
But surprisingly, it's not coming from a bank or payment company — it's coming from Grab, the leading on-demand transportation and mobile payment platform in Southeasia.
Grab, Uber's biggest competition in Southeast Asia, on Wednesday (30/8) announced users will be able to transfer funds in the app's wallet between users, without fees.
They can do it by sending money over to a mobile number registered with Grab, or by physically scanning a friend's QR code.
However by the end of the year, you can also spend your money for shopping in other merchants via GrabPay, such as those in the food and beverage, retail and entertainment industries.
Singapore is the first country where Grab plans to trial this payment feature beyond transportation.
“Today, users can transfer money to one another; in the coming months, they can look forward to use GrabPay to buy food or other goods and services from physical shops,” said Jason Thompson, head of GrabPay on a statement.
Grab annouces a raft of 1,000 small merchants in Singapore that'll be on board, allowing you to pay with a scan of their QR codes.
This can promote the cashless adoption in cash-reliant Southeast Asia. Street vendors still find barriers in infrastructure and bank fees in cashless transaction. This issue was also raised by Singapore's Prime Minister Lee Hsien Loong's National Day Rally speech on 20 August.
According to Value Penguin, to take a credit card, a street vendor would have to get a point-of-sale system that works with MasterCard or Visa, and pay fees of between 1 percent and 3 percent on each transaction.
Grab hasn't announced its merchant fee structure yet. But if it's acceptably low to the small retailer, it could really help unshackle users here from carrying cash around.
For Grab, its headstart into the market with 1,000 merchants in Singapore (and presumably way more in the region) may well further entrench users in relying on the app, beyond calling for rides.
Grab already claims about 72 percent market share for private vehicle sharing, and 95 percent for taxis in Southeast Asia, where it's in seven countries fighting Uber.
It also processes 1 billion payment transactions annually for rides, but it's got to prepare to add merchants to that load soon.
Thompson said, “(As) one of the most frequently used consumer apps, we believe Grab can drive mass adoption of mobile payments in Singapore and across South-east Asia.”
So while the country continues to look for a way to go cashless, Grab'salready out of the gates. It'll be interesting to see who's next on its tail