CarouPay is late to the digital wallet game

The mobile classifieds app’s journey into digital wallet may turn out to be an expensive lesson. It may end up like the struggling Sea group and its Airpay.


Ever since its launch in 2012, Carousell has expanded to seven countries. The startup is one of the world’s largest and fastest growing classifieds marketplaces. It has been ranked as the top shopping app in countries, like Australia, Hong Kong and Taiwan. Carousell started off in Singapore. It has a diverse range of products in 29 categories, including cars and lifestyle gadgets.

One of Carousell’s pain points was the lack of trust between the buyers and sellers on its marketplace. CarouPay serves as the integrated payment option to build that trust.

CarouPay’s three benefits – convenience, commitment and assurance

Carousell has planned well for the June 2018 launch of CarouPay. It has previously suggested a launch date around the second half of 2018. It also held a naming contest to socialise the idea of an in-app payment feature. Users will be able to complete transactions without leaving the app. This function reduces reliance on third-party platforms and cash payments during meet-ups.

CarouPay works in three simple steps. Firstly, buyers will make payment using a credit card, debit card or DBS PayLah! when placing an order. Next, the sellers accept the offer and deliver the item based on buyer’s mailing preference. Lastly, Carousell will release payment to seller’s wallet after item receipt or seven days after item dispatch.

If the feature becomes a hit, CarouPay will be a source of revenue for the firm. It takes a nominal success fee of 4.98% + S$0.50 (US$0.37) for all successful transactions. However, additional charges may deter users from adopting CarouPay. As part of pre-launch benefits, there is a 50% discount on success fees. This may be extended to boost the number of CarouPay-enabled users.

Besides, it will be tricky to decide who should bear the transaction charge. Both buyers and sellers may prefer to stick to the current options of bank transfer or meet-ups. Given the myriad of products on Carousell, it may also be silly to pay for such charges when buying a low-value item.

Could CarouPay be a decision made as a result of circumstances and funding?

Carousell offers official meetup points to promote safe meetup transactions. It has collaborated with Frasers Property Singapore to designate trusted meet-up spots. The official meet-up spots in 10 shopping malls provide onsite security. Carousell’s co-founder and president mentioned that both parties conceived the idea after a networking event. Similarly, could the new CarouPay feature be created due to DBS’s collaboration with the firm?

Also, this safety initiative may convince users that CarouPay is unnecessary. The motivation for switching to an alternative option is low. The meet-up rate is around 60%. A possible reason would be the preference for physical goods inspection.

DBS is the newest investor in Carousell

Carousell has the backing of leading international Venture Capitalists. The list includes Sequoia Capital, Rakuten Ventures, 500 Startups, Golden Gate Ventures, and QuestVC. With the latest funding of US$85 million in May 2018, the total funding reached US$126.8 million.

Source: Crunchbase

The latest series C round has brought in DBS, the largest bank in Southeast Asia and Singapore. The purpose of the latest funding was to accelerate Carousell’s product innovation. At the same time, it will help bolster its talent and deep technology capabilities. These elements will elevate the Carousell marketplace. Carousell’s passion in the field of Artificial Intelligence is commendable. Its smart listing and smart filter features improve buying experience in the app.

Carousell is not fresh in the finance industry. It has started a strategic partnership with MoneySmart in March 2018. MoneySmart has been around since 2009, with the aim of helping Singaporeans make better financial decisions. A series of MoneySmart-recommended financial products are now available on the app. DBS’s presence as a new investor suggests exciting times ahead. Financial products and payment services will make their way onto Carousell’s platforms. According to DBS Group CEO Piyush Gupta, the bank has been leveraging on digital technology and innovation. It wants to seamlessly integrate banking into the lives of customers.

CarouPay lags behind other e-payment wallets

Entering the digital wallet space may be the natural next course of action. However, it may not be the right one. The e-payment industry is fragmented with multiple payment providers. CarouPay’s failure will derail the firm’s progress as it competes against Lazada and Shopee. If a digital wallet is a must, CarouPay should have been launched earlier. It may end up like Sea Limited. Its AirPay innovation depends on Shopee’s success to grow. The digital financial services pillar chalked up an operating loss of US$9 million.

Carousell has its finger in every pie. It has quickly expanded from fashion, property to cars. The startup also dabbles with acquisitions to speed up its growth. With so much on its plate, it is challenging to spread out its resources. As listing increases, the occurrence of scam cases increases too. In Singapore, there have mobile phone purchase scams and fake tickets. This erodes the trust in the mobile listing app.

It will be a waste if it ends up getting distracted from its founding purpose. Carousell’s core mission is to “inspire everyone in the world to start selling”. It is debatable as to whether each initiative helps to get more people on the app or to transact more via the app. For now, low adoption rate will limit CarouPay’s potential. The founders will have a tough time making this initiative a success.