SINGAPORE: Grab, the Singapore-based ride-hailing and payments company, is set to start remittance services in Southeast Asia, targeting a market long dominated by banks and firms like Western Union Co.
From early next year, GrabPay wallets will be able to transfer money instantly to another country, allowing users to bypass banks and transfer agents, it said in a statement Thursday.
Grab will oversee the movement of funds and guarantee end-to-end transfers, it said.
The remittance industry “suffers from opaque and expensive pricing structures coupled with inefficient delivery operations,” Grab said.
Costs of cross-border fund transfers remain elevated because banks view remittances as a high-risk business due to concerns about money laundering, the World Bank said in an April report.
East Asia and Pacific, which includes Southeast Asia, is the second-most expensive region for international money transfers, trailing only Sub-Saharan Africa, the report shows.
With many of their citizens working abroad, the Philippines, Vietnam and Indonesia were among the top 10 receivers of remittances globally in 2017, netting $56 billion in total, according to the World Bank report.
In the past month, Grab has formed partnerships with lenders including Bangkok-based Kasikornbank Pcl and Singapore’s United Overseas Bank Ltd., in a bid to add funding sources and broaden its reach in Southeast Asia, home to more than 600 million people.
The financial-technology firm operates in eight Southeast Asian countries: Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar and Cambodia. - Bloomberg
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