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GrabPay sets sights on Cambodia and Myanmar

Singapore-based app provider intends to grow along with ASEAN economies

Grab sees such a big opportunity in the 10-member Association of Southeast Asian Nations that it does not plan to expand its payments business outside the bloc. (Photo by Kentaro Iwamoto)

SINGAPORE -- Southeast Asia's largest ride-hailing group plans to take its mobile payments service into Cambodia and Myanmar as it expands its range of businesses throughout ASEAN countries, according to a senior executive.

Reuben Lai, senior managing director of the Singapore-based company's financial arm, identified the two countries as next on the list. Grab's ride-hailing app is already available in these markets, as well as six other ASEAN countries.

The 6-year-old startup, which does not intend to expand outside of the Association of Southeast Asian Nations, expects to grow its payments service by tapping the potential of the bloc's combined population of 650 million, a large portion of which is unbanked.

The payments business is becoming central to the company's digital consumer services. Through its merger with the Southeast Asian arm of Uber Technologies earlier this year, Grab also expanded its food delivery service.

Grab's decision to focus on ASEAN countries for digital payments comes as the competition in digital payments across Asia heats up. Line, the chat app,  this year began aggressively pushing its payments services. U.S. tech giant Amazon this fall chose Japan to roll out a digital payments service. In Indonesia, Go-Jek, Grab's main Southeast Asian rival, also considers e-payments essential for corralling users within its digital ecosystems. In India, Paytm this summer received an estimated $346 million investment from Warren Buffett's Berkshire Hathaway. The service has roughly 350 million users.

Grab does not disclose the number of its GrabPay users. Nor does it detail the payment business's revenue. Instead it talks about the payments business having "tremendous trajectory."

Lai said Grab intended to tap into the millions of ASEAN consumers who lack bank accounts and who have been "invisible to the financial system. ... We will bring them into the financial system and give them relevant products. We believe that this is a pivotal point in our growth in Southeast Asia."

According to the World Bank's Global Findex database, 48% of Indonesians 15 and older had a bank account in 2017. In the Philippines, the corresponding figure was 32%. In Vietnam, it was 30%. It is Grab's intention to grow with these and other Southeast Asian economies.

The company also plans to start a regional remittance service early next year. The goal is to get Southeast Asians to think of Grab as their "one ASEAN e-wallet."

"The [financial] inclusion story," Lai said, "is very strong."

Yet it will be a difficult journey. "We've got 10 countries, 10 regulators and 10 currencies," Lai said during a forum in mid-November. Grab will have to navigate through nations at opposite ends of the economic development ladder, through religious differences that sometimes spark violence and through a rift that is opening up over China's increasing sway in the region.

reuben lai Reuben Lai, senior managing director for Grab Financial, sees a gold mine in the millions of ASEAN consumers who have been "invisible to the financial system." (Photo by Kentaro Iwamoto)

And there are other entrenched players in the industry, including Alibaba Group Holding's Alipay and Tencent Holdings' WeChat Pay, both of which have been able to ride China's economic boom to global prominence.

Unlike its Chinese rivals, Grab has to lean on local partners as it expands its payments business. Early next year, Grab will take its payments app to a sixth ASEAN country, Thailand, where Kasikornbank, Thailand's fourth largest lender, will provide the necessary license.

GrabPay, which began in 2016, operates in Singapore, Malaysia and the Philippines on its own. In Indonesia and Vietnam, the service is offered in collaboration with local partners.

Grab is not alone in taking the partnership route through ASEAN. Go-Jek in mid-November announced a regional partnership with Singapore's DBS Group Holdings, the region's largest bank. DBS and Go-Jek will collaborate on payment services for Go-Jek drivers and customers in Singapore. They will also explore opportunities to work together across the region, a DBS spokesperson told the Nikkei Asian Review.

In addition, the region's largest mobile carrier, Singapore Telecommunications, offers its own mobile payment service in Singapore and plans to expand its e-payment partnerships across Southeast Asia.

"We hope to get this 'ASEAN 6' running," Lai said, "so that we can focus on moving to the other remaining four countries, including Myanmar and Cambodia."

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