Most Asian unicorns, whether they are messaging apps, e-commerce platforms, gaming platforms or transport apps, are entering Fintech by tackling the lucrative mobile payment market, hoping to benefit from a major advantage: a large base of loyal users.

Asian unicorns, often backed by venture capital, know that the integration of a payment system is the key to achieving profitability.

Their role models Alibaba and WeChat, the Chinese e-commerce and messaging platforms, have become the two most powerful companies in China thanks to their transformation strategy into service platforms revolving around their respective payment systems AliPay and WeChat Pay. WeChat now sees $500 billion in transactions annually.

Asian tech startups transition to Fintech

In Indonesia, the fourth largest market in the world, Go-Jek, an Uber for scooters, launched its GoPay mobile wallet in April 2016. Go-Jek drivers receive a bonus if their customers accept to store their change in GoPay. This stored value  allows them to benefit from a discount on their next trip. GoPay is trying to make their form of payment a habit for customers, , introducing new features to encourage use , including the possibility last March to transfer GoPay credit to one another without paying any transfer fees. GoPay has become the 4th most used mobile wallet in the country in less than a year of existence. Its competitor Grab has raised $1.5 billion this month to strengthen its nascent payment platform, GrabPay, launched in July 2016, and also acquired Indonesian payment startup  Kudo in April 2017 to integrate into its platform.

Fintech startups Asia Payment

Most Asian unicorns in all industries have launched their payment wallet in the last few years

In India, the situation is similar. The leading Indian transport app, Ola, competitor of Uber, launched its mobile wallet Ola Money in 2015. Originally built to pay Ola drivers, it is now used for shopping, buying airline tickets and recently paying for hotel rooms following a partnership with India’s leading hotel room provider Oyo Rooms. Elsewhere in the market,  Indian e-commerce giant Flipkart acquired the existing mobile wallet PhonePe in April 2016 and launched a “Buy Now, Pay Later” feature in June, thus entering into competition with credit cards whilst engaging in a bold attempt to differentiate itself from its competitor Amazon. Hike Messenger, WhatsApp’s Indian competitor, launched Hike Wallet in June in partnership with one of the country’s leading banks Yes Bank! The app essentially allows you to make transfers between friends, and  is in the process of partnering with merchants to tackle online and offline payments, like WeChat Pay.

Southeast Asian leaders also have invested in payment. Garena, the Singaporean unicorn and gaming leader, has its own  AirPay payments wallet, which today exceeds $510 million in annual transactions. HelloPay, the mobile wallet linked to the Southeast Asian e-commerce giant Lazada, has just been integrated with AliPay. LINE Pay, the mobile wallet for the Korean messaging application LINE is the leading messaging app in Thailand, and was integrated with local payments player Rabbit to form Rabbit LINE Pay which is now used to pay bills, buy airline tickets and  transfer money to friends.

We should see a fierce war between the numerous wallets in the coming months, leading to a consolidation of the market.

This content has been published first in IEV Premium Fintech (July-August 2017), our magazine for digital transformation in the financial industry across Asia & Africa for business leaders.