B OTH WERE founded by Harvard Business School graduates, from the same year. Both have apps that have been downloaded more than 100m times. Both started with ride-hailing and expanded into other logistics businesses, such as deliveries and food-ordering. The story of two South-East Asian “deca-unicorns”—fintechs valued above $10bn—is usually told in terms of their rivalry. This report is more concerned with how ride-hailing services can bring banking to the masses in a largely unbanked region.

The older is Gojek (the name comes from ojek, the Indonesian word for a motorcycle taxi). Founded in 2010, it expanded beyond Indonesia only in 2018. It is now also active in Vietnam and Thailand, and in January entered Singapore, its rival’s current base.

Grab, founded in Malaysia in 2012, went multinational earlier. Last year it pulled ahead of Gojek when Uber called time on a price war with Grab, took a 27.5% stake in its erstwhile rival and left the region. It is now active in the same four countries as Gojek, plus Cambodia, Malaysia, Myanmar and the Philippines. Gojek’s main edge in what is now a two-way fight is that it is native to Indonesia, which, at 265m, accounts for two-fifths of the region’s population.

At first, the pair’s apps simply put customers and drivers in touch, with payment in cash. Since 75-80% of South-East Asians are unbanked, enabling customers to go cashless required lateral thinking. Inspiration came from the way kiosks and convenience stores sell mobile-phone credit. Now drivers (who get help with opening bank accounts for themselves) act like mobile top-up stations for in-app credit. Passengers can hand over extra cash on top of their fare and ask the driver to add it to their balance in the app.

More recently, Grab and Gojek have enabled digital wallets to be topped up in cash with third parties, such as kiosks and convenience stores. And they are signing up retailers to accept QR -code-enabled payments using their apps. Each aims to be used for all sorts of purchases, not just for services offered through their apps.

The biggest obstacle for each (apart from its rival) is slow adoption by retailers. Speeding things up means persuading retailers that new ordering and payment options will increase profits. Grab says its average cashless user makes twice as many transactions as one who pays in cash, and is 30% more likely to use several of its services rather than just one. “Our pitch to a food merchant is that with Grab Food you typically see a 20-30% uplift in transactions, and with Grab Pay you see lower costs,” says Reuben Lai, senior managing director of Grab Financial, the group’s payment arm.

Both firms are moving into other financial services, such as small-business loans and microinsurance. They can use transaction data to credit-score, and take payments from in-app wallets, which cuts the risk of default. Grab, with its region-wide footprint, is also looking at cross-border remittances. “Our ambition is to build the ASEAN [Association of South-East Asian Nations] wallet to enable any consumer to buy anything, online or offline, and access any financial service, anytime, anywhere,” says Mr Lai.

Neither wants to make loans or underwrite insurance itself. Like Ant Financial, they insist they want to work in partnership with incumbent banks. The right way to think of Gojek’s payment arm, Go-Pay, says Aldi Haryopratomo, its chief executive, is as a “bridge between people who don’t have access to financial services and people who want to provide them”. The hardest part of his job, he says, is convincing banks that Go-Pay is a potential partner, not a threat. “I don’t want to have to work the way that they do. I don’t want to have their balance-sheet. They’re only in 30% of the market; there’s another 70%. There’s enough for all of us.”

If South-East Asia’s ride-hailing giants succeed in their ambitions, the region’s incumbents may never develop into anything that looks like the full-coverage retail banking available in the developed world. They may hold on to better-off individuals and big businesses, while everyone else buys the products they originate on mobile platforms that combine financial and other services. Rather than unbundling the constituent parts of banking, the mobile phone may stop them being bundled in the first place.