Grab partners with Singtel to apply for a full digital banking license

Singapore-based tech company Grab has partnered with Singapore Telecommunications (Singtel) to apply for a full digital banking license, according to South China Morning Post.

Grab will own a 60% stake in the consortium that will apply for the bank license in Singapore, while the telco known as Singtel will hold the rest, according to a joint statement. The consortium plans to set up a digital bank targeting so-called digital-first consumers, as well as small and medium enterprises that lack access to credit. 

The move teams one of Southeast Asia’s largest operators of online businesses, from finance to car-hailing, up with Singapore’s largest telecommunications company. The Monetary Authority of Singapore unveiled plans this year to grant as many as five virtual bank licenses to boost competition and innovation. Of these, two will be full bank licenses and three wholesale licenses limited to serving corporate clients only. For Grab, a digital banking business complements its growing suite of services built atop a ride-hailing platform that is expanding regionally. Its advantage over other nonbank companies is an existing share of online payments built up under the GrabPay brand from ride-sharing users and local merchants. The start-up, one of Southeast Asia’s most valuable, is expected to fold its financial operations into any eventual digital bank.

Grab does not disclose the number of users – which include many for food delivery – but said its app has been downloaded onto more than 166 million mobile devices in Southeast Asia. 

Grab has expanded into financial services across Southeast Asia in partnership with 60 financial institutions including United Overseas Bank in Singapore and Malayan Banking in Malaysia. It set up the Grab Financial Group in 2018, which, among other things, provides digital payments services and personal loans. 

Singtel has been offering its own mobile payments service in cooperation with regional associates, including in Thailand. Users can pay via its Dash app when travelling wherever Dash’s partners are located. The app can also be accessed through Apple Pay.