Why does the GrabPay-Stripe partnership matter?

Singapore-based super app Grab recently announced that its digital wallet GrabPay is partnering with online payment giant Stripe, with both companies looking at the Southeast Asian market and its projected ecommerce rise.

While the tie-up got a lot of attention, some people on social media questioned whether this is something new, as Grab and Stripe have been collaborating for around five years. Since 2016, Stripe has been processing in-app transactions made on the Grab platform, such as car rides and deliveries. 

So what’s changed since then?

A customer using GrabPay at a store / Source: GrabPay

A Grab spokesperson told Tech in Asia that the new  partnership will allow the company to “process off-Grab platform transactions as well.” This means that in Singapore and Malaysia, people can now use GrabPay to buy goods or services from online merchants. Businesses in these countries can now also offer GrabPay as an online payment method through Stripe.

So far, Stripe is present only in Singapore and Malaysia, with a preview of its platform available in the Philippines upon request.

Stripe has set its sights on Asia, as signaled by its increased hiring in the region, Reuters reported last December. But Southeast Asia proved to be tough to enter, as differing regulations per country prompted the dual-headquartered company to slow down, according to The Ken.

That said, once Stripe does expand into the rest of the region, having GrabPay as a payment option could speed up its adoption among merchants.

Grabbing its regional reach

Singapore and Malaysia already have a number of e-wallet and payment apps, including Alipay, Google Pay, Fave Pay, and Apple Pay. 

Will having another choice actually matter? And more importantly, why would people want to load money into an e-wallet when there are other payment apps that offer direct cashless or online payments?

Photo credit: Tech in Asia

One factor in Grab’s favor is its ability to tap into its user base, a sizable clientele amassed through its services. As of December 2020, the company has 25 million monthly transacting users.

Stripe already accepts Alipay, Google Pay, and Apple Pay. But Peh Quan Yao, a research analyst at Euromonitor International, told Tech in Asia that GrabPay has a “significant competitive advantage” against these e-wallets.

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