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Grab Expands Financial Services Beyond GrabPay: Here Are 4 Things You Need To Know About New Investment, Loans And Payment Products

The mega app just got bigger.


Besides using Grab for food (GrabFood), groceries (GrabMart) and transport, Grab also wants to be part of your wallet (GrabPay) and financial life. As part of Grab’s continued effort to grow their product offerings and service to customers, they are expanding into micro-investing, consumer lending and flexible payment solutions.

Here are 4 things you need to know about their new services: AutoInvest, Consumer Third-Party Loans and Buy Now, Pay Later.

#1 Micro-Invest With AutoInvest

Micro-investing is investing in tiny amounts. Grab’s AutoInvest is a bite-sized approach to investing. Every time you spend or make a transaction (i.e. using Grab, GrabFood, GrabMart, GrabPay), you also top-up a small amount that goes into AutoInvest. Every time you spend, you are also investing. As the process is automated, you are building an investing habit without much additional effort.

With AutoInvest, there is no transaction fees for making the investment and the minimum investment sum per transaction can be as low as $1.00. The funds are invested into actively managed portfolios with an estimated return of 1.8% p.a. and expense ratio of 0.45% p.a. Currently, the investment partners for AutoInvest are Fullerton Fund Management and UOB Asset Management.

#2 AutoInvest Is Not A Substitute For Regular Investing

However, as AutoInvest is tied to transactions, you cannot make lump-sum investments. This means that if you have substantial savings that you wish to invest at a similar yield, you should consider a cash management account instead.

Additionally, the funds invested by AutoInvest are limited. If you wish to make investments that yield higher returns or select your investments with the same digital convenience, you can consider using either an online brokerage or a robo advisor.

Note: Funds invested in AutoInvest can only be cashed out into your GrabPay account. As of now, you cannot cash out the funds to your bank account.

#3 Take Loans With Third-Party Institutions Through Grab

As part of the Grab eco-system, Grab is also introducing Consumer Third-Party Loans. This distribution service aims to provide easy access to loans from third parties (e.g. banks) within the Grab platform. Grab will not offer loans directly but will act as a platform to enable users to search for licensed loans from bank partners for their everyday borrowing needs. User can then access and securely apply for the loans directly within the app.

Full details of this service will be released later after Grab finalises their list of bank partners. While this service makes it easier for people to take loans to meet their cashflow needs, do be aware that the potential pitfalls of taking a loan still applies.

Read Also: Instalment Loans Vs Credit Line Vs Balance Transfer: Which Should You Use?

#4 Buy Now, Pay Later

Aptly named, Buy Now, Pay Later allows users to make an immediate purchase but defer the payment to a later time at 0% interest. There are two options: one for monthly instalments (PayLater instalments) and one for deferral of payment to the following month (PayLater Postpaid).

Grab will be rolling out this feature first to a select group of users in October 2020, who will have to complete a GrabPay Know-Your-Customer process before they are able to use the service. Grab plans to onboard more than 100 merchants, including beauty, fashion and furniture retailers in Singapore and Malaysia, by the end of the year.

Read Also: Paying In Full VS Interest-Free Instalments: 4 Reasons It Makes Sense To Pay In Instalments

While these features sound exciting, especially in the context of the Grab app, they are still in the process of rolling out. If you have an urgent need for services such as personal loans and instalment payment plans, there are pre-existing similar solutions in the market, albeit without the ultra-convenience of using Grab.