Grab steps outside Southeast Asia for the first time with Mastercard partnership

Photo credit: Håkan Dahlström Photography

Grab app users will soon be able to pay with their GrabPay e-wallet at merchants all over the world, thanks to a new partnership that the ride-hailing company has struck with Mastercard.

From next year, users will be able to apply for Mastercard prepaid cards through the Grab app. They will be issued with both a virtual card that can be stored in their GrabPay wallet as well as a physical stored-value card.

They can top up their cards by handing cash to any of Grab’s 8 million partners – including drivers, merchants, and agents – across Southeast Asia. Grab said in a statement that partners will effectively serve as “mobile ATMs” and will “benefit from the additional cash flow top-ups offer them.”

For Mastercard, joining up with GrabPay offers it a rapid and relatively cheap way to expand its presence in the region, which maintains a preference for cash over digital payments. “Without changing infrastructure, we can now offer merchants the opportunity to tap into Grab’s user base of emerging middle-class consumers, covering one in six mobile phones in Southeast Asia,” said Rama Sridhar, executive vice president, Digital & Emerging Partnerships and New Payment Flows at Mastercard.

The physical top-up card could also prove useful for customers in the region’s rural and more remote areas, where internet and mobile network connectivity can be poor.

Reuben Lai, senior managing director of Grab Financial, said that the card “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 percent of Southeast Asians with a credit card.”

Leap forward

Image credit: Grab

Moreover, the partnership represents a major leap forward for Grab in its self-defined drive to become Southeast Asia’s “everyday super app.” In other words, it aims to be the region’s answer to platforms that combine multiple on-demand services and payments, such as WeChat or Meituan-Dianping in China. (It should be noted that both have invested in Grab’s Indonesian archrival and “super app” contender, Go-Jek).

People with the virtual card in their GrabPay wallet will be able to spend at any merchant in the world with a NFC-enabled Mastercard point-of-sale system as well as any ecommerce site offering Mastercard payments. Moreover, they’ll be able to collect GrabRewards loyalty points on purchases they make globally.

Grab’s deal with Mastercard partly mirrors the route taken by Chinese e-wallets Alipay and WeChat Pay, which have expanded their worldwide presence through partnerships with local payment platforms. This has increasingly enabled Chinese tourists and overseas residents to pay using the same apps they use on a daily basis back in China.

Users of the new GrabPay Mastercard will also be able to top it up with a variety of different currencies – meaning that business travelers or holidaymakers from Southeast Asia will be able to avoid exchange and transaction fees.

Grab expects to begin offering the card during the first half of next year, with Singapore and the Philippines the first markets where it will be made available.