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Japan-headquartered automobile manufacturer Toyota has joined the ranks of investors in Singapore’s ride-hailing service Grab, the company confirmed this week. Toyota’s trading arm, Toyota Tsuho Corp., will participate in a previously announced funding round estimated at $2.5 billion that includes Japan-based telecom SoftBank Group and China’s on-demand transportation giant Didi Chuxing.
In addition to the funding, Grab will also gain a partner for data collaboration in Toyota. According to a statement released by Grab, the company will provide Toyota with driving pattern data from 100 vehicles in its fleet. Toyota will crunch the numbers to provide recommendations for optimizing its vehicles to fit the needs of Grab drivers.
Grab, which serves seven markets in Southeast Asia from its Singapore headquarters, is one of the larger players vying for supremacy in the region. It counts among its major competitors Indonesia’s Go-Jek and the US’ Uber.
But while Uber has been mired in internal scandals and a recently concluded CEO search, Grab and Go-Jek have been drawing attention of late by attracting some high-level investors. For instance, just a few days ago, Chinese ecommerce firm JD.com added its name to the roster of companies funding Go-Jek. Despite this, Uber is far from out of contention as a sector leader in the region.
In a separate announcement, Grab also said it was launching a peer-to-peer (P2P) fund transfer feature within its digital payments service, GrabPay. The company also said it would expand the ability of GrabPay users to pay for goods and services other than rides by partnering with some 1,000 merchants in Singapore in the coming months.
Grab indicated it had already seen high usage rates of its mobile wallet service among those hailing rides. “Every day, over 75% of Grab users in Singapore go cashless and use GrabPay to pay for rides,” said Jason Thompson, head of GrabPay.
The company is aiming to use P2P money transfers and purchases made with GrabPay for items outside the app’s ecosystem to drive Singapore’s adoption of mobile payment services—an area where the city-state currently lags.
Grab is hoping to get a jump-start on cornering the potentially lucrative digital payments sector in Southeast Asia, a region where consumers are likely to skip the adoption of credit and debit cards in favor of payment services facilitated by their mobile devices.
Singapore Prime Minister Lee Hsien Loong recently gave a speech naming the increased adoption of digital payments as one of the government’s goals, noting that six in 10 transactions in the country were completed using cash or checks. Lee blamed the lack of interoperability among varying payment systems as one of the hindrances to digital payment adoption.
But that may soon change. The Monetary Authority of Singapore, a regulatory body, announced plans this month to implement a universal QR code standard that could be used to support both local and international digital payment services.
QR codes are already widely used in China, perhaps the world leader when it comes to mobile payment services, to complete both online and offline digital payments.
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