It’s raining payments space partnerships and deals in Indonesia, southeast Asia’s largest market.
The latest to enter the payments space, Lippo Group’s Ovo.id, an e-money transfer company, has partnered with GrabPay’s electronic money in a partnership aimed to ramp up their position in the market.
“We’ve formed a co-branding partnership with OVO. GrabPay, Grab’s in-app cashless feature, is now rebranded as ‘GrabPay, powered by OVO’. As part of this co-branding partnership, we are now focused on leveraging each others’ technology expertise and partner networks to co-develop the mobile payments platform that caters best to consumer needs of convenience, value and security. It’s a commercial co-branding partnership and we will continue to deepen the partnership in future,” according to a Grab spokesperson.
Industry sources have told this portal that an equity investment of a sizable amount between both parties, Ovo and GrabPay, could also be in the works.
The partnership coincides with GrabPay rival Go-Jek, Indonesia’s largest ride-hailing service, announcing deals to acquire three local fintech companies to further beef up its formidable payments arm.
According to media reports, GrabPay Southeast Asia managing director Jason Thompson has said that OVO has officially owned the e-money service licence from Bank Indonesia since August 22, 2017.
In a report by Katadata, Jason Thompson was quoted as saying that “Grab passengers can start to re-refill GrabPay credits and use, ‘GrabPay powered by OVO’ to pay for their trips booked with the Grab app from now onwards.”
The partnership is seen to deliver a win-win for both players. To Grab, this brings the much-needed local payments knowledge and for Ovo, it translates into enhancing user base.
According to Katadata, both parties will increase Grab’s agent network in 500 cities, loyalty programs with data analysis, and improve privacy to reduce fraud.
Grab and Ovo have another common link: The Riady family. The Riady family, which owns the Lippo Group, has invested in Grab through Venturra. According to reports, while they have invested $100 million in Grab, which has helped MatahariMall.com, Lippo’s e-commerce, in different ways.
While OVO has an electronic money licence issued under PT Visionet International, the company operates under LippoX, a digital payment company owned by Lippo Group, The group has been very aggressive in growing OVO over the last few months. Industry observers indicate that Lippo was offering heavy discounts up to 30% or more if customers pay through OVO at the group malls.