7 things you probably didn't know about GrabPay in Singapore

Everyone uses GrabPay to pay for Grab rides, GrabFood orders, and maybe Liho bubble tea once in a while - but Grab really, really wants it to be more than an occasional payment platform.

In fact, GrabPay has been pretty aggressively expanding its scope of services in the past year, and even seasoned Grab users might not know about all its developments.

Here's a little PSA so you know what you're getting into the next time you tap on that green icon.

1. GRABPAY IS NOW OFFICIALLY REGULATED BY MAS

If you have been assiduously withdrawing money from ATMs and refusing to hop on the e-wallet bandwagon because you're afraid that the company might vanish with your money, a la Obike…

Well, it should reassure you that GrabPay is now officially regulated by the Monetary Authority of Singapore.

In February 2019, Parliament passed a new Payment Services Bill to regulate e-wallets like GrabPay, which means that Grab now has to answer to MAS if there's any fishy business going on.

The new bill means that MAS can now enforce measures to reduce the risks associated with e-wallets and online payment services, such as money laundering, cyber attacks, and (of course) loss of customer's money.

2. CREDIT CARDS ARE STARTING TO EXCLUDE GRABPAY TOP-UPS FROM REWARDS / MILES / CASHBACK

I'm pretty sure there are lots of people who happily top up their GrabPay wallets with their miles cards, on the premise that you can earn accelerated miles (or points or cash rebates) for online spending.

Although topping up your GrabPay wallet is technically an online transaction, and some credit cards do indeed reward you for spending online, some banks have already stopped awarding points or cash rebates on GrabPay top-ups. The DBS Woman's World Card is one such example.

Yet using your credit card to pay for Grab rides the regular way still gets you points or rebates. What gives?

It's most likely because GrabPay's e-wallet function is now being increasingly recognised as 'quasi-cash'.

This type of transaction (e.g. EZ-Link top-ups) has always been excluded in most banks' T&Cs, so it's nothing new. It's just that banks have 'closed one eye' for a long time. But now that GrabPay e-wallets are officially under MAS' care, it's likely that they'll start to enforce the exclusion rule.

3. YOU CAN USE GRABPAY FOR P2P PAYMENT (BUT DON'T DO IT.)

If you don't have PayNow or Paylah - Mom, is that you? - or refuse to use it for whatever reason, it's actually possible to use GrabPay to pay your friend back for bubble tea.

There are no transaction fees and it can be done easily. On the home screen of the Grab app, tap on 'Pay' (just like you would when paying a hawker or retail store with GrabPay). By default you'll be prompted to scan a QR code, but there's a tab that lets you pay to a mobile number.

Enter the payee's mobile number and the amount you wish to pay. You are limited by the amount of money left in your GrabPay e-wallet, though.

This used to be a great hack for people who chase miles or cashback by topping up their GrabPay wallets - but since GrabPay top-ups might not be recognised by banks in the future (see point 2), I wouldn't count on it as a replacement for cash or PayNow.

Also, unless your buddy is a hardcore Grab user, it might ruin your friendship to pay them by GrabPay. That's like paying someone back in NTUC vouchers, because there is no way to turn GrabPay credits back into real money.

4. GRABPAY HAS AN ANNUAL TRANSACTION LIMIT OF $5,000, UNLESS…

If you've been heavily using GrabPay to pay for rides, food delivery, at restaurants, and your Ah Long (just kidding, stay away from Ah Longs) you might eventually hit a limit.

Yes, GrabPay imposes a transaction limit of $5,000 a year per user, which I gather is a requirement by MAS to reduce the risk of money-laundering and such. That works out to about $400 of spending a month, which isn't too far off for some of the heavy Grab users I know.

If you're near the limit, there's a way to unlock it: By getting your account verified. Traditionally this is done by uploading your NRIC and other documents, but it can now be done by logging into your SingPass with MyInfo.

After a couple of days, your profile will be verified and you can now spend up to $30,000 a year on GrabPay. That is, if you don't mind Big Brother knowing what you eat for lunch…

5. COMING SOON TO A GRAB APP NEAR YOU: GRABPAY REMITTANCE + GRAB CREDIT CARD

Verified GrabPay accounts can also unlock a bunch of other features that Grab will be rolling out in the coming months.

For most Singaporeans, the most enticing one would be the ability to use GrabPay overseas. Currently, GrabPay is only available within the same country, so even if you take Grab around in Bangkok or JB, you have to pay with cash or credit card.

When the 'international' version comes out, you can use GrabPay to pay for Grab services abroad. Grab is partnering with Mastercard to create a virtual Grab credit card which allows you to transact overseas. But I'll reserve comment until it goes live, because there's no point using it if the exchange rate is awful (like it is with most credit cards…).

Another nice upcoming feature that GrabPay is working on is remittance to other countries, starting with the Philippines. Again, it all depends on the rates, but I have a feeling it'll give the banks and remittance companies a serious run for their money.

6. SPEAKING OF CREDIT CARDS, GRAB HAS THIS FEATURE CALLED 'PAY LATER'

You know how swiping your credit card gives you that shiok feeling of having to pay absolutely nothing at all - until the bill comes and you suddenly understand the meaning of cardiac arrest?

Well, Grab wants to do the same too, which is why there's now the option to 'PayLater'.

This means you can take Grab rides and order GrabFood as much as you want, and you'll only feel the pinch on a certain day each month. Woohoo!

Supposedly, you can activate PayLater by going to the Payment tab in the Grab app, but I couldn't find it on mine. If you successfully activate it, you will get a pre-approved 'credit limit' of e.g. $200. At the point of payment, you can choose to use PayLater or any other regular payment mode.

The service is free for now, but make sure you pay your monthly Grab bill within 7 days of the due date, otherwise you'll be slapped with late fees. Payment is done through your GrabPay balance.

7. THE INEVITABLE CONCLUSION: GRAB IS TURNING INTO A FINANCIAL COMPANY

It was never enough for Grab to provide services like ride-hailing and food delivery, especially with the rock-bottom prices they offer.

We all know that the real money is in financial services - things like money lending, insurance, investments. After moving gradually in that direction for ages, it's finally official that Grab is now a fintech company.

Grab now has an arm called Grab Financial Services Asia, which takes care of everything related to GrabPay and GrabRewards.

Insurance is also a natural fit for Grab - Grab now works with insurance company Chubb to sell various types of insurance (personal accident, loss of income, car insurance) to Grab drivers.

Grab Financial is also moving into moneylending services and 'financing' for consumer goods like smartphones.

So I wouldn't be too surprised if, in the near future, you can pay for a new laptop at Harvey Norman with Grab PayLater, or if someone from Grab calls you to ask if you're interested in a personal loan.

This article was first published in MoneySmart.