People using the Southeast Asian ride-hailing app Grab in Singapore will now be able to send GrabPay Credits to one another within the app — the first time the company has opened up its payment service to non-transportation transactions.
The peer-to-peer (P2P) funds transfer system leverages both QR-code technology and phone numbers to transfer the credits.
The service will launch in Singapore first, but the Head of GrabPay, Jason Thompson, said the company is working with regional regulators to expand the service across Southeast Asia.
For now, the transfer system is designed to be used only between individuals, but in the coming months Grab says it plans to build-out its technology so merchants can onboard the system and sell goods via Grab.
Thompson also hinted at the development of more complicated financial services, like helping people obtain working capital.
“We want GrabPay everywhere, and we mean everywhere,” said Thompson.
GrabPay’s P2P option works as follows (we have included images at the bottom of this article):
- Users add GrabPay Credits (on the top right-hand corner of the app) via payment methods like credit cards or AliPay.
- They are then given the option to send money via QR Code or telephone number.
- The recipient will get a notification that the money has been transferred to their account.
e27 took the service for a spin with a Grab representative and the words that come to mind are ‘sleek and smooth’.
It should only take one ‘tutorial’ to understand the UI and much of the service’s brilliance lies in its simplicity. Plus, it is fast. We tried both the QR-code option and sending via phone number and the transaction took mere seconds to complete.
The only ‘roadblock’ is if the sender has zero credits they need to upload more credits from their credit card before sending (they can’t send Credits straight from a card to other person’s GrabPay account). But, even that was fairly painless.
“[Users] have to be able to use the product for the first time, and if they can’t, there won’t be a second time,” said Thompson.
Finally, it should be noted that only drivers can cash-out of the GrabPay account.
The company does not take a transaction fee and Thompson said the P2P service will be free for the near future.
iOS users can start using the feature now while Android users will have to wait until September 4 to start.
The upcoming merchant payment option
Despite this, according to Today, 90 per cent of Singaporeans prefer to use cash in their day-to-day lives.
This trend does not apply to the Grab ecosystem. Even prior to today’s news, the company says 75 per cent of users use GrabPay to pay for rides. Thompson says the ease-of-use and trust are why so many Grab users buck the cash-first trend when using the app.
This means that when Grab launches the merchant payment option, it plans to target cash-first companies like Hawker centres, retailers and SMEs. Instead of jumping from cash to credit card kiosks to mobile, Grab wants these business owners to make Grab their first cashless payment system.
The strategy is to start with merchants, based on the idea that when shops start accepting GrabPay it will drive consumer adoption (and not the other way around).
Grab then wants to leverage the power of GrabRewards to build stickiness. (Thompson was clear to mention that GrabRewards is an extremely important part of the company’s strategy).
Finally, the company wants to build a large consumer base (like what has happened with its ride-hailing service) to drive education.
The goal is once these steps are completed, it will create a circle that will feed into itself to spur growth.
Calling cash “our biggest competitor in Southeast Asia”, Thompson said that for every dollar a person spends on GrabPay, they will receive one rewards point. The idea is to make a ‘Grab dollar’ worth more than a real dollar. This is essential for convincing reluctant cash-only merchants to start using the product.
The merchant payment system has not been launched yet, but based on the press briefing it is imminent.
“Grab can drive mass adoption of mobile payments in Singapore and across Southeast Asia. We have a stake in educating and bringing local communities into the cashless future, and are open to working with public and private sector organisations to enable this,” said Thompson.
GrabPay P2P UI
Step One: Click the circle in the top right corner
Step Two: Make sure you ain’t broke
Step Three (option A): Type in your friend’s phone number
Step Four (option A): Buy a ride
Step Three (option B): Create a ‘send’ QR Code
Step Four (Option B): Ask friend to scan QR Code
Step Five (Option B): High-five
Correction: An earlier version of this article said users get 1 point per dollar they top-up in GrabPay. Actually they get 1 point for every dollar they spend.