HONG KONG: Citigroup has teamed up with Singapore-based ride-hailing firm Grab to launch co-branded credit cards, as it looks to boost its Asian customer base by about 13% via partnerships with digital firms, a senior Citi executive said.
The new cards mark the latest step in Grab’s big push into the financial services sector, an area it has earmarked for growth. For the U.S. bank, it is in line with its strategy to offer its products within online ecosystems as consumers spend more time on smartphones.
The Citi-Grab co-branded cards will be issued in the Philippines on Tuesday and in Thailand later this year, before being rolled our in other Southeast Asian markets.
“Today we have about 16 million customers in Asia, and our aspiration is to increase this by about two million in the next few years through partnerships alone,” Gonzalo Luchetti, Citi’s head of consumer banking for Asia Pacific, Europe, the Middle East and Africa, told Reuters.
Citi launched a co-branded credit card with Indian payments firm Paytm last month and with Qantas two years ago.
The bank’s net income from Asia Pacific was $4.4 billion in 2018, with a third of its $15.3 billion revenue coming from Southeast Asia – where Grab is the leading ride-hailing firm.
Grab, which started as a taxi-hailing app firm, has been aggressively expanding into financial services and said, earlier this year, that it was pursuing lending licences across Southeast Asia.
“The Citi-Grab credit card is a natural next step as we create more value for our digital first, always in GrabPay users,” Huey Tyng Ooi, managing director of GrabPay Singapore, Malaysia, and the Philippines, said in a statement.
Grab is also exploring spinning off its financial services unit and has mandated banks to approach potential minority investors, Reuters reported last month, citing sources.
Banks and insurance firms are among the potential investors in the Grab unit, a source has said.
Lenders around the world are trying to partner with digital players to get closer to consumers.
A recent case in point would be Goldman Sachs’ credit card deal with Apple that can potentially connect Goldman with hundreds of millions of iPhone users.