E-payment war morphing from single to paired fighters

Competition is now between teams of unicorn and incumbent; Go-Jek is in bed with DBS, Grab with UOB and Razer with NETS


THE e-payment fight has taken on a new complexion. Facing each other on the frontlines are no longer single warriors - be it a Super App, fintech startup or financial incumbent - but newly-formed teams of unicorn and incumbent.

On Monday, three such partnerships were unveiled at the Singapore FinTech Festival - Go-Jek and DBS Bank; Grab and UOB Bank; and Razer and NETS. These dramatic tie-ups take the tussle for a unified e-payments system for Singapore and the region to a new level, industry observers told The Business Times.

Rakesh Krishnamuti, PayPal's country manager for Singapore, said these partnerships are emerging and critical in driving the adoption of e-payments in Singapore.

"Collaboration will go a long way in addressing the gap between consumer awareness and adoption, as well as mend fractures within the e-payments landscape to ultimately create a more cash-light nation."

Omer Ali Khan, general manager for South-east Asia at Accenture-owned IT consultancy firm Avanade, said such tie-ups bring the best of both worlds in terms of expertise and capabilities. Financial institutions will deliver financial capabilities honed from years of experience, while unicorns will focus on marketing and winning customers' allegiance.

Arvind Sankaran, venture partner at Jungle Ventures, said such partnerships play to each other's strengths - startups gain merchant acceptance and banking support, while incumbents get access to the consumer's everyday life, such as through his or her "transit moments".

The winner will be the team with the best synergies in terms of agility, seamless collaboration and robust technologies that talk to one another, Mr Sankaran noted.

"Of course, the consumer is the winner and eventually the judge of who will become their daily digital habit. Therefore, how the combined capabilities are presented and delivered to the consumer - whether intuitively, simply, in a fun way, and of real sustained value - will determine where these tie-ups really go."

To Trey Zagante, founder of innovation consultancy Venturetec, it's the intangible benefits offered by the partnerships for the incumbent players that are "particularly exciting".

These could include an uplift in digital and product development capabilities, a heightened focus on creating great customer experiences, and an injection of entrepreneurial spirit into an often traditional corporate culture.

Mr Zagante added: "There is often a halo-effect associated with innovative brands which can positively impact the incumbents' share price as well as their ability to attract and retain top talent."

But such benefits also come with challenges. A key concern of such partnerships is how to ensure compliance without stifling innovation, he said. "Many of these hyper-growth startups push regulatory and customer data privacy boundaries in their pursuit of growth. Whilst fines from regulators or negative customer sentiment are often tolerated by venture backers of tech unicorns, they are often not well received by share market investors of listed companies.

"Managing regulatory and compliance issues without slowing growth and innovation is a balancing act that many corporates will struggle with."

He said: "The key to an effective partnership lies in the choice of partner. It is critical that both parties share the same philosophy or values, strategy and approach to the initiative to ensure mutual success."


On Monday, Go-Jek and DBS announced that they will "work together on payment services ahead of Go-Jek's arrival in Singapore", a partnership that will soon extend to other countries in South-east Asia.

Go-Jek, whose backers include Google, Temasek and Tencent, is set to launch in Singapore "within the coming weeks", and as part of this, DBS customers here will enjoy "a slew of exciting privileges", both parties said in a joint statement.

When asked about the new services and privileges, DBS and Go-Jek only said they would share details in due course.

DBS chief Piyush Gupta noted at the FinTech Festival on Monday that Go-Jek is "attractive" as a partner for Indonesia exposure. A Go-Jek spokesperson told BT that Singapore is "an important market" for the Jakarta-based startup which has "ambitious plans" for its expansion in South-east Asia.

On the same day, Grab and UOB announced a strategic partnership that will enable the banking group to deliver financial services to Grab's users across South-east Asia. Under the alliance, UOB will become Grab's preferred banking partner in Singapore, and Grab will introduce a new top-up method for GrabPay where users can top up their e-wallet directly from their UOB bank account.

Both firms will explore launching co-branded credit cards in the region. UOB will embed features of its upcoming digital bank within the Grab app, allowing users to access banking services quickly and conveniently. UOB will also explore supporting Grab in areas such as fleet financing, regional and centralised treasury management, and workplace banking.

Janet Young, head of group channels and digitalisation at UOB, told BT that a key purpose of the alliance is to make UOB's digital bank more attractive to consumers. For instance, consumers will soon be able to open a UOB account using the Grab app.

Ooi Huey Tyng, managing director of GrabPay Singapore, Malaysia and Philippines, added that GrabPay could help position UOB as the primary account of users; currently, GrabPay users spend two times more than those who use cash.

Not to be left out, Razer is collaborating with NETS to enable Razer Pay acceptance on NETS' 40,000 Unified Point of Sale terminals across Singapore, and with local household brands such as Reebonz, Sistic, SP Group and WTS Travel to support Razer Pay capabilities on their platforms.

The Singapore and San Francisco-based gaming and payments company - which in July unveiled an exclusive partnership with UOB for payment and cash management solutions - said its goal is to enable "full interoperability" by the time Razer Pay launches in Singapore in Q1 2019.

Asked to comment on the latest developments from OCBC's banking rivals, Koh Ching Ching, head of group brand and communications, said the bank had also recently partnered various household brands including Xiaomi and StarHub to drive a collaborative ecosystem.

"In June this year, we announced that we are partnering StarHub and market leaders from eight other industries - travel, insurance, retail, hospitality, food and beverage, grocery, petrol and transport - to develop Singapore's first multi-industry coalition loyalty programme, where reward points can be used across a wide range of industries.

"Together with our partners, we will be able to cover almost all aspects of a customer's lifestyle needs."