Grab eyes stronger foothold in e-payments

SINGAPORE— Southeast Asian ride-hailing app Grab wants to strengthen its foothold in the electronic payments market within the next two years through greater engagement in the region’s transportation sector, company executives said.

The company’s proprietary payments platform GrabPay—which is currently used to pay for its various transportation services —is envisioned to eventually work like other online payment platforms, servicing payment needs for transportation and possibly consumer goods.

Citing a market study conducted by Google and investment firm Temasek, Grab Group chief executive officer and co-founder Anthony Tan said by 2025, the ride-hailing industry in Southeast Asia is expected to grow five times in terms of ridership, with revenues expected to rise to $13 billion annually.

As more people seek more convenient and safe ways of paying for transportation and other services, the electronic payment business in the region is expected to grow into a $500-billion market.

“We see payments (market) to be a half-a-trillion dollar industry. It’s a massive industry so there is tremendous opportunity,” said Tan in a presentation made during an event marking the company’s fifth anniversary here.

“The first thing you think about transport is how you’re going to pay for it so you just jump on it seamlessly. Payments and transport are highly symbiotic… Grab is focused to deliver this because these are daily multiple use cases,” he added.

Jerald Singh, head of product development at Grab, said the company wants to position GrabPay as a top online payment platform in the region in the next five years.

“Our goal is to become the number one consumer platform (in Southeast Asia) in the next five years,” he said.

“When you talk about payments, we definitely see the opportunity. At this point, we have to make sure the payments is aligned with transport so we fill the gaps and make people comfortable with using GrabPay as a secure form of payment. This way it will be easier to expand this to online stores,” he added.

But this does not stop Grab from expanding its payments services in retail.

In April, Grab announced it is acquiring Kudo, Indonesia’s leading online to offline (O2O) e-commerce platform. Upon completion of the acquisition, Kudo’s platform will be integrated with GrabPay. Kudo’s O2O platform currently enables unbanked consumers in Indonesia to shop online.

Through the GrabRewards section of the Grab app, riders can already avail of discounts from selected stores but does not allow for direct payments of goods.

Grab co-funder Tai Hooi Ling said now that the company is able to significantly develop its transport business, it will devote more of its energy in the next two years to expand its payments platform.