SINGAPORE -- Southeast Asia's largest ride-hailing operator Grab is rushing to expand its digital payment service network across the region as its biggest rival Go-Jek expands beyond its home base of Indonesia.
Along with the region's rapid digitalization, a battle for payment platform dominance is likely to heat up.
On Thursday, Grab said it had been granted a license as an e-money operator by the Philippines' central bank, making that country the fifth market where it offers mobile wallet services after Singapore, Malaysia, Indonesia and Vietnam. The license will allow Singapore-based Grab to have more partner merchants in mobile payments, which also means more services for its users.
Like many other mobile payment services, Grab's offering allows users to make cashless payments via their smartphone, by scanning a QR code, a two-dimensional barcode, displayed in stores. The company is capitalizing on its large network of ride-hailing users and drivers to expand the services rapidly across the region.
"We expect to be offering payments services in all six core [Association of Southeast Asian Nations member] countries by end of this year," a Grab spokesperson told the Nikkei Asian Review, with the sixth market being Thailand.
In Thailand, Grab is in talks over a partnership with the country's biggest retailer Central Group, which operates shopping malls, restaurants and hotels across the country. Though it is still under negotiation, the partnership will involve capital investment by the Thai group into Grab's local unit, with the aim of promoting the ride-hailer's digital payment service at Central's malls, which are operated by unit Central Pattana.
Separately, Grab earlier this month announced a partnership with Vietnamese mobile payment operator Moca Technology and Service. By partnering with an existing operator, Grab hopes to provide mobile payment services to a broad group of consumers in the country.
According to Grab, users will be able to use mobile payment services developed by Moca, which include bill payments and paying at retail outlets including fast-food and convenience stores.
Grab's expansion plans closely mirror those of Indonesian-based rival Go-Jek, which is targeting the markets of the Philippines, Thailand and Vietnam, after revealing a $500m overseas investment plan earlier this year. Go-Jek officially launched a ride-hailing service in Vietnam this month and plans to enter the Philippines, Thailand and Singapore in the coming months. Go-Jek might also take its mobile payment service, which is currently available only in Indonesia, into other countries.
With digital payment at the heart of online services such as e-commerce, the operators stand to benefit greatly from Southeast Asia's ongoing digitalization.
"Much of Southeast Asia appears poised to leap directly from cash to digital payments, skipping credit and debit cards," Boston Consulting Group noted in a recent report.
Grab sees particular business opportunities in the Philippines, which "has one of the highest percentages of people in Southeast Asia who do not have a bank account and who transact in cash," according to Ooi Huey Tyng, managing director of GrabPay Malaysia, Singapore and the Philippines. "We can now help millions participate in the cashless, digital economy without the need for a bank account or to download additional apps."