Southeast Asia is home to about 640 million people, yet card usage is low by international standards and it is estimated that 70% of the population are still unbanked.
With their new initiative, the two companies hope to leverage Grab’s 110 million users and Mastercard’s network of three million merchant outlets, Reuters reported.
Specifically, Grab will issue virtual and physical prepaid cards directly from its mobile app, allowing customers to top up their cards using cash via its network of drivers, agents and vendors on the GrabPay platform.
In addition, the cards can be used at any retailer in the world that accepts Mastercard transactions. According to Pymnts.com, that would enable GrabPay to become the first e-wallet from Southeast Asia to be accepted around the world.
“This partnership goes beyond Grab issuing prepaid cards and is a game-changer for Southeast Asia. We are the first e-wallet at scale from our region to be accepted worldwide,” said Reuben Lai, senior managing director of Grab Financial.
“Not only does this solidify Grab’s position as Southeast Asia’s undisputed fintech leader, but it also enables the region’s 400 million unbanked and underserved consumers to buy goods and services online – something that was previously limited to the less than 10% of Southeast Asians with a credit card.”
On top of extending their reach across the region, another advantage of the partnership is the significant amount of valuable consumer insights that the two companies will be able to collect, the Financial Times reported, especially since 200 million people are expected to enter the middle class by 2030.
As Grab’s Lai explained to TechCrunch in an interview: “We see GrabPay as a glue that goes across all the products we offer, and rewards our users for using them. GrabPay users spend two times more than regular users and they stay twice longer on our platform.”
The new service is expected to be available in the first half of 2019, beginning in Singapore and the Philippines, before rolling out across the region.
Sourced from Reuters, Pymnts.com, Financial Times, TechCrunch; additional content by WARC staff