Big Southeast Asian Banks Share a Ride with Grab and Go-Jek
More app-based digital finance services are well on their way to the region
PHOTO CREDIT: Getty Images
The battle that drives Southeast Asia’s ride-hailing unicorns isn’t taking place just on the road.
Singapore-based Grab announced on Monday that it has entered a strategic alliance with United Overseas Bank Limited (UOB), one of the biggest banks in Southeast Asia, to accelerate digital services in the region. This partnership will enable UOB to deliver financial services to Grab’s fast-growing mobile-first user base in Southeast Asia. Grab can now offer the bank’s suite of payment solutions directly from its app.
This will also allow Grab to increase the number of ways its users can top-up money to their GrabPay wallet. Aside from topping up via credit or debit card and Grab’s network of drivers, agents, and merchants, users will soon be able to top up their GrabPay wallet directly from their bank account.
UOB will be Grab’s credit card partner in Singapore, Indonesia, Malaysia, Thailand, and Vietnam, which will make consumers enjoy special privileges when using their UOB cards on Grab services. The companies are also looking into launching a co-branded credit card in the region.
“By combining our strengths, we will offer consumers more convenient payments services regionally and help more people move from cash to cashless,” says Grab co-founder and CEO Anthony Tan in a statement.
On the other side of the road, Go-Jek also announced a partnership with a banking behemoth. It has partnered with DBS to offer regional payment services, as the Indonesian unicorn is set to launch in Singapore in the coming weeks. With this, DBS clients will be able to enjoy exclusive privileges on Go-Jek’s services.
"We know that people are desperate for more choice in the sector and we believe we can satisfy this demand," says Go-Jek president Andre Soelistyo. "The response from the driver community since we opened pre-registration [in Singapore] has been overwhelming and we are confident that by working with DBS, we will see the same level of excitement from consumers too."
The rise of super-apps
Go-Jek and Grab both moved from simply helping people get to their destinations to becoming on-demand apps that people in Southeast Asia almost can’t live without. The goal is to become a one-stop shop that can fulfill every consumer’s need — from logistics to food deliveries to digital payments, the possibilities these apps can cover seem endless.
Here’s the kind of industry that these unicorns are looking at: Southeast Asians spend an average of 3.6 hours a day on their smartphones, according to a Google-Temasek report. On the same report, it states that mobile commerce has seen the highest growth in ride-hailing services, with gross merchandise volume expected to be at $20.1 billion by 2025. Smartphone users account for 90% of Southeast Asian Internet users. As of 2017, mobile commerce penetration was at 52% in Thailand, 40% in Malaysia, 39% in Singapore, 33% in Vietnam, 31% in Indonesia, and 25% in the Philippines.
Not just about ride-hailing apps turning into super-apps
For banking giants, the story goes beyond ride-hailing and becoming Southeast Asia’s super-app.
“Our alliance with Grab represents two like-minded companies harnessing our respective strengths to create value for consumers and to drive greater access to financial services in the region. The alliance will also complement our efforts to scale up our customer franchise across ASEAN,” says We Ee Cheong, Deputy Chairman and CEO of UOB, in a statement.
“We are committed to making payments simple, seamless and invisible for our customers,” says Tan Su Shan, DBS Group Head of consumer banking and wealth management, also in a statement. "In doing so, we are stepping up to partner with like-minded companies like Go-Jek, one of Southeast Asia's most iconic technology companies, to build inclusive digital ecosystems for our customers."
In Indonesia alone, Go-Jek processes 100 million transactions for its 20 to 25 million monthly users, as reported by Reuters on September 2018. Grab has 2 billion rides served as of July 2018, as published on its website. With these figures, among other factors, finance industry leaders are finally taking notice.
Without a doubt, the race is on to becoming that super-app who can meet the first and last mile needs of consumers. And as for the banking behemoths sharing the ride, it is about getting access to the unicorns’ huge consumer base to offer more and more services down the road — a route definitely worth taking.