THE heat is on again for Super Apps in South-east Asia. This time, the fight lies in the race to develop the region's e-wallet of choice.
Grab on Thursday turned the competition up a notch when it announced a partnership with Thailand's Kasikornbank (KBank) to launch mobile payment application GrabPay by KBank.
The mobile wallet, which is slated to be launched as soon as early 2019, will allow Grab customers to pay for transport and delivery services, transfer funds, purchase products and services online, and make QR-code payments in restaurants and shops across Thailand.
Through a national e-payments scheme called PromptPay, all three million QR-enabled merchants in the country will be able to accept GrabPay by KBank.
KBank has also pumped US$50 million into Grab, as part of Grab's ongoing fundraising round that includes Toyota Motor Corporation, Microsoft Corp and Hyundai Motor Group.
With the latest partnership, GrabPay is now available in six out of ten Asean countries - Singapore, Malaysia, Indonesia, Vietnam, the Philippines and Thailand.
Reuben Lai, senior managing director of Grab Financial, said in a media briefing on Thursday morning that Grab's vision is to enable its consumers to transact across South-east Asia using a single mobile app. The company will adopt a partnership-based approach to drive this vision.
Mr Lai said Grab is well-positioned to achieve its goal due to having the regional reach, consumer insights, as well as trust and use-cases.
Grab Financial, the fintech arm of Grab launched in March, has seen a 3.5 times growth in monthly active users in the last six months and a 2.3 times growth in total payments volume since March.
For Super App unicorns Grab and Go-Jek, developing the region's go-to digital wallet has become a key catalyst for its strategy to become a one-stop shop for consumer offerings.
"Typically, a category-specific app such as say, ride-share, ventures into payments offerings as a launch-pad to become a Super App. Having a broad and open payments capability is vital for those with Super App aspirations; it allows them to capture customer behaviour outside the app," said Shirish Jain, director at Strategy&, the strategy consulting arm of the PwC network.
Jonathan Yap, a telecoms and payments strategy analyst at Frost & Sullivan, said that one of the main reasons why these Super Apps are bent on becoming the "default" app for e-payments is so that they can gather as much data on the consumer as possible.
"If these Super Apps possess sufficient data, they can predict with a great deal of accuracy what customers may be looking for, be it price or product," said Mr Yap. "This cross-selling function is extremely powerful because it not only allows Super Apps to monetise their products even more, it also creates a tighter ecosystem around the app, forming a virtuous cycle."
In Indonesia, Go-Jek's e-payment system Go-Pay powers transactions across the app's multiple offerings such as food and package delivery, housecleaning and even beauty services.
Mr Yap added that a digital payment platform can also help firms better determine credit scores for individuals and businesses within the large unbanked population in South-east Asia.
Grab's partnership with KBank will see the two parties jointly offering products to their customer base, including loans to help merchants grow their business.
Grab Financial has also piloted micro-lending services in five Asean markets. Mr Lai said part of the reason why the firm is able to price loans more affordably is because it has insights from the borrower, who is within its ecosystem. For instance, it is able to have full visibility of a driver's cashflow.
Though GrabPay currently has the upper hand in terms of geographical reach, rival Go-Jek is increasingly expanding its turf in countries such as Vietnam and Thailand.
That said, Grab is clear on where the battle lies.
"The competition is with cash, not other mobile wallets," a spokesperson told The Business Times. "With more than nine out of ten transactions in the region still in cash, financial institutions and fintech players need to work together to 'expand the pie' and bring more people into the cashless economy."
The spokesperson added: "Ten countries, ten currencies and too many wallets in each country - the Asean e-wallet we are building will reduce confusion and increase trust in going cashless for consumers and merchants."