Carousell is launching its own digital wallet to improve payments for its users

Photo credit: Henzy David / Tech in Asia

One of the criticisms most often leveled at Carousell is that it lacks an integrated payments system. According to analysts, the inability to complete purchases in-platform could end up negatively affecting users’ trust in the portal.

At Tech in Asia Singapore 2018 today, co-founder and CEO Quek Siu Rui answered critics by unveiling CarouPay.

Due to launch next month in Singapore, CarouPay will allow buyers and sellers to complete transactions without leaving the Carousell app, rather than having to rely on third-party platforms or doing meet-ups to hand over cash.

CarouPay will be a digital wallet within the Carousell app. “More than half of our sellers will end up buying items as well, so maybe it makes sense to have that money in the wallet for purchases,” Quek tells Tech in Asia.

The wallet’s escrow function, which holds the money from a transaction until the sale is cleared by both parties, is a significant step forward for trust and convenience on the platform, according to IDC senior research manager Lawrence Cheok. “We’ve seen success in that sense from China in the early days when Alipay first started off, until trust was no longer an issue,” he says.

Carousell is working with payment partners around Southeast Asia to implement the wallet. Quek sees CarouPay as one more feature meant to make transactions on the app faster and easier for users. So CarouPay will not be a general purpose payment method outside the app – at least for now.

This “closed-loop” nature should help Carousell get more control over the transactions on its platform and handle potential liability issues, Cheok says. It also sets the stage for the startup to eventually open up the wallet for more types of services, much like Grab has done with GrabPay or Sea with AirPay.

Cheok argues that once you facilitate a transaction with your own tool, you gain more insight on your users’ behavior, which can lead to more potential applications and complementary services. He concedes, though, that it’s still too early for something like that.

But what’s important is how the added trust and convenience of using an integrated payments tool could help remove a lot of the friction and enable more sellers on the platform. As Cheok points out, “[Carousell has] the right focus at this point. Without payments, the whole end-to-end experience is a challenge.”

Onstage at Tech in Asia Singapore 2018, Quek claimed that there have been over 49 million transactions on Carousell. “You can already see the scale. After all, consumer-to-consumer is still a niche market compared to general ecommerce,” Cheok says.

Quek declined to reveal which partners Carousell is working with to launch the wallet. Eventually, the team wants to push CarouPay across all seven of its markets.

The startup plans to use artificial intelligence to help users list items faster by suggesting descriptions, listing titles, and even prices based on past similar transactions. It’s also building an AI camera on the app that can identify things in your house that you could potentially sell.

Carousell confirmed this week it has raised US$85 million in series C funding. Rakuten Ventures and EDBI co-led the round, with Singaporean bank DBS coming on board as a new investor.