In a move to deepen its financial services spread across Southeast Asia, Singapore-based ride-hailing major Grab on Thursday unveiled its cross-border remittance product under Grab Financial.
The remittance product will be officially launched in early 2019.
Calling it the region’s first wallet-to-wallet remittance product, Grab said it will allow both banked and unbanked senders to remit money instantly and securely to receivers in another country using their GrabPay wallets.
Grab also said that the remittance product will pave the way for a multi-currency ASEAN-travel wallet that will “significantly reduce” payment friction for intra-ASEAN tourism and business travel while enhancing cross-border e-commerce opportunities.
“We believe this remittance product will be a game-changer for millions of unbanked or underserved individuals across Southeast Asia. As Southeast Asia’s leading fintech player, Grab Financial is in a unique position to streamline the process of sending money to your loved ones and accelerate financial inclusion for everyone in the region,” said Grab Financial senior managing director Reuben Lai.
Based on World Bank data, Southeast Asia’s remittance market was estimated to be worth $70 billion in 2017. The current market is dominated by incumbent money transfer operators (MTO) and financial institutions.
However, many of the economically-vulnerable foreign workers – one of the most active user groups – continue to be reliant on unlicensed agents, resulting in opaque and expensive pricing structures coupled with inefficient delivery operations.
“Inter-operable real time regional payment systems will expand opportunities, especially for citizens and small businesses, to access products and services across ASEAN. We hope to see more of such innovative digital services from the private sector,” said Vivian Balakrishnan, Minister for Foreign Affairs, Singapore, at the 33rd ASEAN Summit.
This portal had earlier reported that Grab will look to enter the remittance space as its payments platform strengthens. The startup has been making a slew of partnership announcements for its financial arm. It recently secured $50 million in funding from Thailand-based KASIKORNBANK, entering the Thai payment space.
A few days ago, Grab forged a regional strategic alliance with United Overseas Bank Ltd (UOB) at the Singapore Fintech Festival 2018, which entails an undisclosed investment from the financial institution into the ride-hailing unicorn. Its Indonesia-based rival Go-Jek also announced a partnership with DBS Bank for regional payments ahead of its beta launch in Singapore “in the coming weeks”.