We came across this at a florist in Singapore. What does this tell us?
Some of our thoughts:
- Alipay and WeChat Pay are very present in Singapore – and many other cities in Southeast Asia Chinese tourists frequent.
- GrabPay is finally accepted at third parties. Technology-wise it is (relatively) not complicated but when do you scale up, risk & fraud become a huge issue.
- GrabPay seems to be acquiring merchants themselves – which makes sense during testing and early rollout phase, but will become very hard once you scale up.
- In comparison, Alipay and WeChat Pay use third parties: Uniweb & Fomo respectively. Third parties do all the legwork acquiring, setting up and managing merchants, in return for a certain percentage (usually lower than 0.5%) of the transaction value.
- That means, as a third party in Singapore in Singapore you need at least S$200 million transaction value to make S$1 million revenue. Hardly a sexy business.
- Alipay and WeChat Pay seem to have better execution – their stickers stick, while GrabPay’s doesn’t. OK you might argue sticky tape is used for the Alipay ‘sticker’, but still, it sticks, while GrabPay’s doesn’t.
- Carrot is simply amazing – after so many (Perx, Sugar etc.) have proven that the model of standalone rewards applications in a relatively small, highly sophisticated consumer market doesn’t work, there are still people willing to step into this minezone. You might ask, why do miles – well, they are not independent, they are strongly attached to some powerful use cases with high frequency and/or high-value transactions.
Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].