DBS on Monday announced a tie-up with Go-Jek, the Indonesian transportation and technology company. It looks to be a meeting of like minds.
Euromoney has written at length about both institutions. DBS is the bank that wants to be seen as, and valued as, a tech company; Go-Jek is the ride-hailing and food delivery company that wants to forge a second career as a payments company.
Both see the value in taking one entrenched skillset and applying it to another opportunity.
The tie-up is billed as a regional strategic partnership, and its first illustration will be the launch of Go-Jek’s ride-hailing app in Singapore in the next few weeks, with DBS closely involved.
At this early stage, it seems to involve DBS customers getting privileges for using the Go-Jek service, which is not, in itself, particularly groundbreaking – Citi does the same with Grab, Go-Jek’s main competitor in Indonesia – and more may follow.
Tan Su Shan, DBS
Tan Su Shan, DBS’s group head of consumer banking and wealth management, is set to speak about the partnership at the Singapore FinTech Festival this week.
Ahead of her presentation she has said, in released remarks, that DBS is committed to “making payments simple, seamless and invisible for our customers”, as it has tried to do in-house through its DBS PayLah! mobile wallet.
“In doing so, we are stepping up to partner with like-minded companies like Go-Jek, one of southeast Asia’s most iconic technology companies, to build inclusive digital ecosystems for our customers,” she adds.
In August, Euromoney spent a day with Go-Pay, the payments arm of Go-Jek, a business distinctive for its grassroots-level engagement, which includes elements of microfinance.
Go-Jek’s ambitions in payments have been made clear with three simultaneous acquisitions in the payments space, all of which are being integrated now; the intention is expected to be that wherever Go-Jek expands to – most recently Vietnam – its payments arm will follow.
Go-Pay was not mentioned in the DBS/Go-Jek announcement on Monday, and it’s not clear if the end-goal is for DBS to be the wallet for Go-Jek in Singapore, or to integrate with it, but it is not a surprise to see two groups with a common mindset partnering in this way.
About two hours after the DBS/Go-Jek announcement, DBS’s biggest Singaporean competitor, UOB, made an announcement of its own: that it was entering into a strategic alliance with Grab, the Singapore-based but Indonesia-dominated ride-hailing group that, like Go-Jek, has launched a free-standing financial-services arm for its payments business.
In this alliance, UOB will deliver financial services to Grab’s user-base in Asean, including Grab offering directly from its app a number of UOB’s payment solutions.
As part of this deal, UOB will become Grab’s preferred banking partner in Singapore, as well as being a strategic credit card partner for Grab in Singapore, Indonesia, Malaysia, Thailand and Vietnam.
Grab will use UOB’s cash-management services to allow consumers to top up their GrabPay wallets directly from their bank account.
It does not appear that this will affect Citi’s partnership with Grab, through which customers can use points from their Citi card loyalty programme to pay for taxis on Grab.
Again, there was a lot of talk of similar ways of thinking.
“Our alliance with Grab represents two like-minded companies harnessing our respective strengths to create value for consumers and to drive greater access to financial services in the region,” says Wee Ee Cheong, CEO of UOB, in a statement.
UOB has been trying to catch up with the recognition DBS has achieved for its digital endeavours.
In April, it launched a tie-up with China’s Pintec Technology Holdings to improve methods of assessing credit quality in southeast Asia; then in August it unveiled a new digital bank to be rolled out across five Asean markets, aiming for up to five million new customers.
It remains to be seen just how deeply entrenched these relationships prove to be, whether in Singapore or elsewhere in the region, but they do represent an acceptance by the big banks that it is far better to partner with upstart payments groups than to try to compete with them.
This is perhaps not a lesson that the leading Chinese banks learned when Ant Financial (through Alipay) and Tencent (through WeChat) revolutionized consumer payments there.
They are also interesting because of the footprints of the various institutions. UOB is a pure Asean play, strong across southeast Asia. DBS’s strengths outside of Singapore are more in Indonesia, India and Greater China, particularly Hong Kong.
However, both have impressed with their ability to test things out in Singapore and then roll them out in markets with bigger populations, but lower incomes.
Grab and Go-Jek, in turn, have excelled in high-population markets, principally Indonesia, and now want to replicate that penetration elsewhere – both geographically and in product.