Grab, the ride-sharing platform out of Southeast Asia, announced on Thursday (Nov. 15) the launch of a remittance offering under the company’s financial services arm.
In a press release, Grab said the launch of the remittance offering marks a “significant milestone” toward the company’s vision for on ASEAN eWallet that will improve financial inclusion for the growing middle class and micro-entrepreneurs in the region. Grab made the announcement during the 33rd ASEAN Summit.
“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 Dr. Vivian Balakrishnan, Singapore Minister for Foreign Affairs, in the press release.
According to Grab, the remittance market in Southeast Asia was estimated to be valued at $70 billion last year, and is currently dominated by money transfer operators and financial institutions. Many of the economically vulnerable foreign workers who make up one of the most active user groups are reliant on unlicensed agents. What’s more, Grab said the industry suffers from opaque and expensive pricing structures and inefficient delivery operations, resulting in a sub-optimal user experience in which vast sums are lost and unaccounted for during the process.
Grab’s product will let banked and unbanked senders remit money instantly and securely to recipients in another country using a GrabPay wallet. Receivers are able to transfer funds instantaneously, and can choose to either cash out the remitted sum through the regular network or use them on everyday transactions, such as bill payments. Grab said the remittance product will also pave the way for a multi-currency ASEAN-travel wallet that it said will reduce payment friction for intra-ASEAN tourism and business travel, while enhancing cross-border eCommerce opportunities.
“We believe this remittance product will be a game-changer for millions of unbanked or underserved individuals across Southeast Asia,” said Reuben Lai, senior managing director for Grab Financial. “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. We saw the painful process that consumers go through each time they want to send money across the borders, and thought we could make a difference there. Our wallet-to-wallet remittance product will be the first to guarantee the speed, security and ease of use [that] Southeast Asia’s growing middle class really needs.”
Grab Financial said the remittance product will launch in the early part of 2019 and is aimed at addressing common pain points, including limited visibility on the movement of senders’ funds, high transfer fees and issues when funds need to be withdrawn as cash.