Southeast Asian ride-hailing giant Grab said today it will incorporate cross-border remittance into its mobile wallet GrabPay. The feature is expected to be rolled out in early 2019.
Grab did not mention which markets will get to use the remittance feature first but said that it “will first launch in the largest remittance corridors in Southeast Asia, where there is a high concentration of economically-vulnerable workers.”
Using GrabPay, users will be able to view all fees including forex and admin charges upfront before making the transfer. Recipients can either opt to cash out the funds or pay for online or offline services that accept GrabPay.
The move comes as a logical step for the company; GrabPay is firing on all cylinders this year to become the region’s leading unified multi-currency e-payment system.
Just last week, it received US$50 million from major Thai banking group KASIKORNBANK (KBank) to bring GrabPay to Thailand.
Through partnerships with Maybank, OVO, Moca and Bangko Sentral Ng Pilipinas, the mobile wallet is also available in Malaysia, Indonesia, Vietnam and the Philippines, respectively, in addition to Singapore, where Grab is headquartered.
The Southeast Asian remittance market is huge; in 2017, it was estimated to be worth around US$70 billion, according to the World Bank Group.
Much of the remittance is conducted by foreign workers, many who are reliant on traditional brick-and-mortar Money Transfer Operators (MTO) and financial institutions.
The problem is that these services are slow and require a lot of paperwork (senders also have to physically travel down to the outlet to make the transfer).
In addition, these services do not necessarily guarantee an end-to-end transfer of funds from sender to recipient. And to top that off, some may even levy additional convenience fees.
But as the smartphone penetration rate continues to skyrocket in the region, remittance apps could be a serious gamechanger and upseat these incumbents.
While there are a few app-based remittance platforms already available in Southeast Asia, such as Wallex, Coins.ph, Rebit.ph — and even Razer Pay is entering the remiitance business — GrabPay’s extensive reach could see it become the dominant e-remittance platform in the region.