Grab, Southeast Asia’s largest ride-hailing app, is kicking off a new digital wallet service in Singapore as it stakes a claim to the region’s burgeoning mobile payments sector.
Starting Wednesday, Grab will enable its 4 million users in the city-state to scan a quick response, or QR, code to pay for local dishes such as chicken rice and prawn noodles at hawker stands around the country. Grab plans to increase the number of small merchants accepting GrabPay from 25 to 1,000 by the end of December.
Grab, which is bigger than Uber Technologies Inc. in Southeast Asia, wants to build on its success in ride-hailing by adding new services in the more lucrative payments market. The company has expanded from taxi booking to private vehicles, rental cars and shuttle bus services. The five-year-old startup plans to roll out mobile wallet services across the region next year, according to co-founder Tan Hooi Ling.
“It’s just like Grab for transport; when we first started, people didn’t know about it and they needed to try it,” Tan said in an interview in Singapore. “That’s the same transition we can bring with GrabPay, in fact at a faster pace because we already have the user base, trust and technology.”
Grab is among companies racing to be the top mobile payments platform in Singapore, where there is no dominant player. Preference for cash in the country remains higher than the average across the Asia Pacific region, according to a report from Paypal Holdings Inc. Several firms including DBS Group Holdings Ltd. and Visa Inc. are encouraging small cash-based merchants to adopt cashless payments.
As the company expands its payments in Singapore, it’s hit a hurdle in Indonesia after the central bank suspended unlicensed top-up facilities for online services providers. That has forced Grab to suspend the ability of users to add value to their GrabPay since Oct. 16 as it works with the central bank to find a solution.
“Bank Indonesia is looking at the entire ecosystem and we are working with them closely because we know why it’s important,” Tan said.