Super apps to the rescue

Super apps to the rescue

Southeast Asia is becoming a fintech battleground

So-called super apps are flocking to financial services to the point where you would be hard-pressed to find a taxi app that's not trying to upsell you on life insurance or some other financial product.

Super apps like Grab, Go-Jek and Line are partnering with banks to provide online-to-offline (O2O) services, whereby traditional banks give the tech startups credibility and a sense of trust with users while the startups offer banks a gateway to the frontier of digital banking. The super apps leverage their strong user base and big data analytic technologies.

And it's not just ride-hailing apps: Facebook shook up the financial industry with the announcement that it would launch its own "global" currency, Libra, which it claimed would keep a stable value unlike most cryptocurrencies. Facebook sought talks with the Monetary Authority of Singapore and the Bank of Thailand about its plans.

Southeast Asia has become a fintech battleground as super app platforms Grab and Get, the Thai operating unit of Indonesia-based Go-Jek, partner with banks while expanding their own financial services to access underbanked users.

Thailand was the second-largest internet economy in the region at US$6 billion in 2015 and is expected to reach $43 billion by 2025, according to a Google-Temasek study.


In March, CNBC reported that Grab Financial was rolling out several financial services across Southeast Asia. These include launching an online checkout system that would let sellers accept Grab's digital payment service, GrabPay.

Grab said it would also provide credit services such as a postpaid payment option that lets users accumulate spending on the company's services like ride-hailing and food delivery and pay the total amount at the end of each month at no additional cost.

That credit service will first be available in Singapore before expanding to other countries. Another option, to buy goods and pay for them in instalments through Grab Financial, is also in the works.

The company plans to launch an online insurance marketplace for entrepreneurs in April after forging a joint venture with China's Zhong An earlier this year.

In 2018, Grab teamed up with Credit Saison, a Japanese financial services company, to lend in the region. The joint venture is providing working capital loans to small businesses in Singapore while Grab pursues lending licences in other markets.

"By the second half of this year, Grab will open the GrabPay by KBank e-wallet in collaboration with Kasikorn Bank, followed by further nanofinance and microloan services," said Tarin Thaniyavarn, country head of Grab Thailand, the local operating unit of the Singapore-based unicorn startup.

Grab and Kasikornbank entered a partnership in November 2018 through which KBank, through its corporate venture capital firm Beacon VC, invested $50 million in Grab.

Interestingly, KBank has also partnered with Grab's competitor Line, which has announced a fintech product in the pipeline with KBank.

Mr Tarin said the first phase will be the co-branded mobile wallet app supporting payment for Grab's transport and delivery services. In the next phase, the wallet will allow payments outside Grab's app, such as transferring funds to individuals and purchasing products online, or making QR code payments in shops.

Grab also received a nanofinance licence from the Bank of Thailand. The company sees huge opportunity in increasing financial inclusion among poor Thais who lack access to traditional financial markets.

"We have data on our driver partners, many of whom cannot access financial systems," Mr Tarin said. "By using data analytics, Grab has the ability to offer microloans."


Pinya Nittayakasetwat, chief executive of Get, said that when the company began its food delivery service in February, it offered a 10-baht delivery fee to attract users.

Get currently has 20,000 local restaurants on offer with 1 million user downloads and 20,000 driver partners, both for motorcycle taxis and delivery for parcels and food. Bangkok has an estimated 100,000 Get Win motorcycle drivers.

By having more competition, O2O activities such as the food delivery app have grown by at least five times since early this year. Bangkok has a population of over 9 million, of which 2-3% use a food delivery mobile app.

After its recently announced partnership with SCB, Get expects to increase penetration by double-digit rates by the end of 2019, thanks to a continued price war. Get offers three free food deliveries for new customers and three 50% discounts for existing users.

Get currently provides four services: Get Win motorbike hailing, Get Food, Get Messenger and Get Pay, an e-wallet still in the beta version.

By partnering with SCB, Get will help expand its payment and financial services. Get users can use the SCB Easy app, which has 10 million users, to top up their Get wallet. Meanwhile, merchants can cash out from Get Pay to SCB accounts without any fee.

Get will seek the Bank of Thailand's approval to provide digital loans and plans to open a ride-hailing service if the new government legalises such services for vehicles without taxi licences.


Line Corporation, the hugely popular messaging app with 44 million users in Thailand, has a range of new financial services in the pipeline, as well as a few now on offer. Like Grab, Line has partnered with KBank and has an undisclosed financial product launching next year.

Through a partnership with the local payment service Rabbit, Rabbit Line Pay is accepted at all BTS stations in Bangkok, with Line being the most convenient way to top up skytrain fares.

Last year, Line launched its own cryptocurrency, Link, releasing 1 billion tokens on the Bitbox digital asset exchange last September. The company has not, however, integrated the tokens into its main app. Unlike the yet-to-launch Libra, Link is unstable and fluctuates like other common cryptocurrencies -- within the last 30 days it had a price high of $4.54 and a low of $1.13.

"I can't go into more detail about our competition, but we plan to develop Line tokens in the near future to be used globally," said Jun Masuda, Line's chief strategy and marketing officer.

Eventually, the crypto tokens could be used as rewards and payments within the Line app.

The company also plans to launch its own in-app credit score -- first in Japan, later in Thailand -- to enable microloans for users. The credit score would be based on in-app user data, not private messages, as the latter are end-to-end encrypted.

While Line has been unspecific about the exact timeline for new financial services in Thailand, the company's general strategy for adding services is about giving local offices autonomy while identifying the pain point in customers' lives, said Lee Eunjung, senior vice-president for global business development.

"We are always looking for opportunities to create services to help our users," she said. "Whatever pains there are for our users, we try to be on top of how our users are feeling to create a better product."

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