Grab Financial Group, the fintech arm of Grab, announced today a host of new services that include SME lending, insurance updates, an online checkout system and the ability to pay bills via instalment plans.
The offerings are split into two core roadmaps, one is called ‘Grow with Grab’ and includes the lending/insurance services. The other is called ‘Pay with Grab’, which covers the payments services.
Grab’s long-term ambition is to become Southeast Asia’s largest merchant network, fintech lending platform and insurtech policy provider.
“We can leverage our scale and data insights to bring financial services products to market at a more competitive price point than anyone else,” said Reuben Lai the Senior Managing Director of Grab Financial Group in a statement.
The updates were announced at the Money 20/20 conference happening in Singapore this week.
Let’s get a bit more detailed into the updates.
Grow with Grab
In March, 2018, Grab announced a joint venture with the Japanese consumer finances company Credit Saison. The core focus of that partnership was to help people buy the products they would need to become Grab drivers. For example, loans to help buy the smartphones that are necessary to do the job.
The JV eventually started providing working capital loans for SMEs in Singapore. Today, the company announced it will pursue lending across Southeast Asia.
Last week, SGSME, a media company, reported that Grab will offer working capital loans of up to S$100,000 (US$74,000) to SMEs at an interest rate of 1 per cent per month.
Additionally, Grab announced ‘Pay Later’, a post-paid service that will launch in Singapore over the next few months. Pay Later is like a typical mobile phone subscription, allowing people to pay their Grab bill at the end of the month.
Grab will also facilitate an instalment plans that include a zero per cent interest rate over multiple months.
The goal is to provide people who may be under financial strain to have flexibility in their payment structure and avoid high interest rates or missed credit card payments.
Both the lending and payment-instalment services will only be offered to Grab’s most credit-worthy customers, which includes analysing spending patterns on the platform.
Pay with Grab
The two core products of the Pay with Grab roadmap is an online payments tool and a POS-integration service.
The online payment tool allows for e-commerce companies to facilitate transactions using GrabPay. It works just like any other online payment tool like Stripe or PayPal.
The selling point is that, for people who are deeply integrated into the Grab ecosystem, they can start to pay for a large variety of their daily life using Grab.
The e-commerce marketplaces Qoo10 and 11street are two big names that have come onboard and two movie theatres, Cathay Cinemas (Singapore) and SM Cinema (Philippines) will also host the payment tool.
For merchants, Grab has inked partnership agreements with Adyen, Boku, iPay88 and Dragonpay.
The other payment service is an integration service for point-of-sale (POS) devices. Merchants can now add GrabPay as a payment option for their POS system, which will help them streamline their accounting infrastructure.
To date, GrabPay for merchants has used a QR-code system. It is convenient for customers but separates the “Grab bills” from other forms of payment. Integrating into the POS system would shorten this gap.
The POS system will begin in Singapore before expanding regionally. Brands like Coffee Bean Tea & Leaf and Paris Baguette will be early adopters.
For both Go-Jek and Grab, insurance has become an important avenue for attracting new drivers and riders. On this note, Grab partnered with China’s Zhong An Insurance back in January to expand its services.
Grab already offers medical leave insurance for drivers and personal accident insurance during all rides. It also has an Emerald Circle programme for drivers that covers lost earnings due to injury or illness.
The announcement today was that drivers can now use the app to tap into two different insurance products.
First, drivers will be able to top-up their long-term medical leave insurance within Grab. It would also allow drivers not using the Emerald Circle program to apply via the app.
The other update is Grab will let drivers top-up their personal-accident insurance using the app.
Over the rest of 2019, Grab will pursue policies of fractionalised premiums, micro-life insurance and critical illness policies.
Speaking on Grab’s overall financial services plan, Lai said,
“We are beating Southeast Asia’s fragmentation problem by bringing together the largest payments and financial services ecosystem. We have opened up our platform for more than 100 partners across a diverse set of industries ranging from malls to card networks and banks.”