Grab has a super patient, trial-and error strategy to reach profitability

Grab’s recent announcement of the discontinuation of GrabPay Cards reflects the super app’s agility in cutting non-core and loss-making products in the prolonged game of tech domination in South-east Asia.will no longer be able to transact using their physical and digital GrabPay Cards,Four years since its launch in 2019, Grab’s experiment with credit card merchant networks has yielded conclusive results.

To maximise gains and boost average customer spend on the app, Grab layered on more digital financial services: wallet, payment, lending, insurance and wealth management, partnering with banks including Thailand’s Kasikorn Bank. But competition stiffened. Shopee, Gojek and many others launched e-wallets and payment services. Over the past six years, payment start-ups contributed to almost 25 per cent of total venture capital exit proceeds in South-east Asia.

Issuing a Mastercard to GrabPay users was always a half step to get there – by tapping into Mastercard-accepting merchants that Grab did not have to all acquire at once on its own. This arrangement incurs costs including paying third parties for system integration and maintenance, the printing of physical cards, and ongoing communications with the card network.

Since then, Grab’s digital financial services has been recast to include GrabPay, Grab PayLater, travel and ride related insurance, as well as lending products to merchants and drivers. A growing proportion of payments are on-Grab while off-Grab spending is coming down.

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