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Competing E-Wallets 

Several players have signalled their intentions to take a slice of the e-wallet market in Southeast Asia. Telcos such as Singtel from Singapore and Globe from Philippines have been in the news. Then, there is gaming hardware company Razer, which has partnered up with Berjaya Corp in Malaysia, to launch Razer Pay this year. 

Although Alipay and WeChat Pay are established e-wallets in China, they have become popular among merchants in Asean due to Chinese tourists' preference for them. 

When asked which their biggest competitor is, Grab said physical cash. «90 percent of transactions in Asean are still done in cash. It is about changing consumer mindset,» said Lai. 

Accelerating

Grab Financial has set an internal goal to reach 100 million merchants and consumers by 2020. While it did not disclose how close it is to its target, Grab appears to be on track to fulfilling its mission of driving financial inclusion: there are already 110 million downloads of its ride-hailing app, and its e-wallet is already available in 5 Asean countries.

«First, we have an extremely engaging platform – users use our platform 12 times to 15 times a week. Second, we’ve got a lot of insights about their spending habits and what they like to buy and where they go,» said Lai. 

Partnerships

With full visibility of their cash flow, Grab is able to generate credit ratings on its users and provide them with loans when necessary. So far, it has partnered with Credit Saison, Chubb, Maybank, and Moca, which have strengths in different parts 0f the value chain.

As many people operate small shop fronts, Grab decided to equip them with a tablet or mobile phone so as to provide them access to digital goods and services. «We are the intermediary for digital goods and financial services,» said Lai.

Fishing Rods

For those cannot yet afford a tablet or mobile phone, Grab provides installment loans for drivers and agents. «It’s equivalent to giving them a fishing road,» said Lai.

«In Malaysia, we concluded a pilot for one lending program with Credit Saison. People are happy because previously, they could not access loans or can only access loans at very exorbitant rates,» said Lai.

Managing Default Risks

As the app provides visibility of cash flows, the company is able to know a borrower's ability to repay. Secondly, it can also do deductions on a weekly basis, as a borrower's income from his or her businesses come in.

«A bank considers a loan as non-performing loan (NPL) if it is 90 days overdue, but for us, it is in terms of weeks,» said Lai.

Working on Currency Conversion

The e-wallet can currently hold different currencies but users are not yet able to convert these currencies within the app.

«That is something we are working on,» said Lai, adding that they are open to exploring the use of digital currencies.