Looking beyond the Grab-Moca tie-up

The final conclusion of the Competition Administration’s (under the Ministry of Industry and Trade) official investigation into Grab’s alleged economic concentration act after its acquisition of Uber Southeast Asia and Vietnam is not yet available, as the investigation is still underway.

However, the case seems not to affect much Grab’s operation in Vietnam. To expand and diversify its business, the firm has cooperated with Moca Technology and Service Company in developing the payment service GrabPay by Moca. Since the current rule does not allow direct money charging from international credit cards, Grab has closed its GrabPay app and asked non-cash payers to activate direct payment on the GrabPay by Moca without having to download Moca app. Through the Moca digital wallet and payment portal, they can advance money for Grab with the automated teller machine (ATM) cards of seven big commercial banks and the international credit card issued by Vietcombank. This form of payment partnership between Grab-Moca and banks will be further expanded in the future.

Grab customers who do not want to use the GrabPay by Moca can still pay in cash or by international credit cards. However, the previous GrabPay offered many privileges and lower fares than payment by other forms, so, a great number of GrabPay users may shift to GrabPay by Moca, as Grab allows the conversion or refunds money if users no longer has the demand for this payment service. The conversion was expected to be completed in October. However, GrabPay users have complained much about the inconvenience and glitches. So, Grab had to apologize for the inconvenience on Facebook on October 27, and pledged to make the conversion process easier.

The Grab-Moca partnership does not violate the law and benefits both sides. Grab is a strong international ride-hailing firm and its acquisition of Uber Southeast Asia is evidence for its financial strength. Meanwhile, Moca as well as other fintech companies in Vietnam have advantages coveted by Grab, for example, they are allowed to offer the digital payment service by the State Bank of Vietnam. Moca has many big names as its partner banks like Vietcombank, Asia Commercial Bank (ACB) and Vietnam Prosperity (VP) Bank with some 4,000 payment outlets, mainly for consumer goods, transport, education, eatery and fashion.

However, at the press meeting to announce the partnership in September, Grab said it would develop payment services for consumers as well as small and medium enterprises in Vietnam, such as bill payment, phone card top-up and payment at retail outlets. Later, the Grab Financial service will be launched, targeting consumer credit and lending for super small, small and medium businesses. All the services are based on the Grab eco-system developed through Moca. Therefore, like other foreign fintech companies, Grab can enter the payment market in Vietnam without the license from the State Bank of Vietnam. With its stated ambition, the firm will expand beyond payment for the ride-hailing service to payment in other areas.