Grab launches cashless option in F&B joints as e-payment race heats up

Nicholas Yong
Assistant News Editor
Head of payments Jason Thompson (left) and Grab co-founder Tan Hooi Ling with Nornizam Amin, a hawker at Eden Garden Cafe. PHOTO: Nicholas Yong/Yahoo News Singapore

Ride-hailing app Grab has become the latest player to join the race to become Singapore’s leading e-payment platform, drawing on a user base of millions.

Grab users can now use GrabPay Credits, its topup service, to pay for meals at 25 restaurants and hawker stalls in the Central Business District and Bishan area. The company will sign up 1,000 restaurants and shops by the end of the year, and is aiming to add some 20,000 merchants within six months.

Users can top up their credits with a debit/credit card that is linked to the app. They then pay for their meals by scanning a QR code and keying in the amount. While there is no limit on the number of transactions, the amount for a single transaction is limited to $999.

Previously, GrabPay could only be used to pay for rides and to transfer funds to other users.

At the official launch of the GrabPay wallet on Wednesday (1 November) , head of payments Jason Thompson told reporters that the company’s goal is to be the number one e-wallet platform in Southeast Asia. It has started by targeting small businesses like hawkers and restaurants that primarily do cash-based business.

Asked what sets GrabPay apart from the plethora of e-payment options in Singapore, which range from Apple Pay to Android Pay to Samsung Pay, Thompson pointed to the company’s large user base.

“But what differentiates us is…we’ve already got four million downloads in (a population of) 5.6 million people. We’re already used consistently by the people of Singapore, and we’re already trusted. So I think we have an advantage.”

The company declined to reveal how many Grab user accounts are linked to credit/debit cards.

What the merchants think

Gloria Soo, 48, the co-owner of the Energi stall at Eden Garden Cafe, speaks to a customer. PHOTO: Nicholas Yong/Yahoo News Singapore

Merchants who sign up for GrabPay will not have to pay transaction fees for the first six months. Asked what Grab’s long-term strategy is, Thompson said, “There is a material cost to any transaction. As Southeast Asia and the economies in Southeast Asia mature, we expect in the future, there will be charges for payments. But I think that’s not in the foreseeable future. At the moment, driving the adoption…is more important.”

Among the first merchants to sign up for GrabPay is Mohd Nasri Ramli, 28, who runs the Nur Nasi Padang stall at Eden Garden Cafe with his family. He told Yahoo News Singapore that he had only to provide his bank account and hawker license to sign up for the scheme.

“It is more convenient and less hassle. I won’t have a problem like not (having) enough change, and I can have minimal cash. The transactions are very smooth, very convenient.”

Gloria Soo, 48, co-owner of Energi, a stall in the same cafe that serves paleo meals, said GrabPay is “even faster” than using the NETS and NETS FlashPay terminals at her stall.

“I can skip the step of keying in the amount, and there also less chance of making an error. It’s very convenient to check the transaction and see how much Grab has credited to me. Even for someone new who comes in, it’s very easy to teach him. I can clear my queues faster (during) peak period, when I need to clear the line as quickly as possible.”

Soo conceded that businesses like hers cannot go cashless immediately. “We have to buy raw materials and this has to be paid in cash,” she said.

Can it succeed?

In September, tech firm Razer submitted a proposal for a unified e-payment system for Singapore. Called RazerPay, its goal is to be a cloud-based e-wallet which can be accessed via a mobile app, a stored value card or a chip, among others.

Other e-payment platforms have also upped their game. In July, SingTel’s all-in-one mobile payments app Dash doubled the number of shops at which it can be used to more than 50,000 merchant points islandwide.  It can also be used on local e-commerce sites such as Qoo10 and Zalora.

Former veteran technology journalist Oo Gin Lee has tried out numerous e-payment platforms over the years and is sceptical about the prospects of GrabPay’s success.

“From a consumer point of view, the primary problem remains the same: ubiquity and ease of use. NETS is everywhere. Unless they have a system that is as ubiquitous as NETS, why would I want to use it?

“I have to take out my phone and launch the app. It cannot be faster than my new NETS card as it also has the contactless MasterCard paypass debit card built in so I can just tap to pay. And the number of Grab users cannot possibly outnumber NETS users.”