Manila Times —THE Rural Bankers Association of the Philippines (RBAP) is looking to capitalize on the projection of a strong growth in the mobile banking business this year, driven by the continuous flexibility of carriers to adapt according to market needs.
RBAP President Ian Eric Pama said that rural banks will utilize the advantages of cellular phone-based banking in order to hurdle geographical barriers for the industry.
“Now, more than ever, we should use mobile banking to reach out to our clientele and deliver our service to them. If the prognosis of research firms is correct, then we should ride this wave as much as we can,” he said.
“RBAP has long been an active proponent of mobile banking. But with forecasts backing us up, they give the association’s vision more fuel,” he added.
Information and Communications Technology (ICT) research firms see a big jump in the Philippine mobile banking industry this year. Based on its 2012 predictions for the Asia Pacific Region, ICT research firm XMG Global, founded and headed by Filipino-Canadian Lauro Vives, said that the region will be the world’s fastest growing mobile and broadband market with over 3 billion connections this year.
According to XMG, the growth will be driven by three factors: continuous efforts of telecommunications companies to invest an average of 17.4 percent of revenues into capital expenditures to meet emerging demand; variety and flexibility of payment and billing schemes; and low-cost handsets. In the Philippines alone, Smart Communications and Globe Telecom are investing close to P100 billion to upgrade their networks.
In addition, another leading ICT research firm, Gartner, Inc., said that the Philippines is one of only two countries—the other is Kenya—that have successfully implemented mobile payment solutions in micropayments services to distribute money in far-flung areas.
Telecommunications companies like Globe Telecom and Smart Communications have long been employing GCash and Smart Money, respectively, in micropayments services. Smart affiliate Sun Cellular also has its Mobile Pay platform which caters to small and medium scale industries, and small businessmen.
Gartner said that unlike in developing countries, payment schemes using cell phones have been accepted here especially in rural areas in lieu of using cash or credit cards, with the latter remaining largely underutilized. The research firm attributed the success of the Philippine model to the decision of local carriers to adapt their strategies to local market requirements and conditions instead of making the market adapt to them.
Industry experts see mobile banking as the future of rural banking and microfinance especially in remote areas. With mobile phone penetration rate expected to rise to 98 percent by 2015, this gives banking services a broad market base to work with for years to come.
Mobile banking provides a more secure way of making transactions instead of the risk of carrying cash, making one’s cell phone a virtual electronic wallet that can be used for various transactions via text message, like paying bills, purchasing goods and services, and receiving even salary via text-a-sweldo or remittances from abroad via text-a-remittance. In the provinces, mobile banking also bridges the geographic challenges of banking—where banks are usually located in town centers, far from clients who are often in far flung, often inaccessible barrios.
“Microentrepreneurs have utilized mobile banking to the hilt, which used to be an exclusive domain of big businesses. Using cell phones to send and receive money has changed the way rural microentrepreneurs operate and make a living, it has added another positive dimension to doing business in the provinces” said Pama.
“For rural banks, mobile banking provides them with more services and broadens their client base. It also reduces interest and transaction costs for their clients and it is much more secure and simple to use. After all, text messaging is so easy do,” he added.
Since 2005, RBAP’s member rural banks and Globe Telecom’s G-Xchange Inc. (GXI) have processed over P14 billion in GCASH transactions facilitating greater access to banking services in the rural areas. This number is expected to increase this year as rural banks partner with GXI to offer PowerPay+, the first payroll service linked to a mobile wallet with insurance coverage, to better manage payroll in the countryside. It comes with an ATM card allowing withdrawal of salaries from any of the 9,000 ATMs nationwide. Employees also have the option to get their pay from the thousands of GCASH outlets using the GCASH-registered SIM linked to their ATM Card. With PowerPay+, they can take charge of their salaries, get financial security for unforeseen events and enjoy GCASH mobile money services like buying load, sending money and paying bills conveniently.
RBAP has also signed a collaborative agreement with Smart Communications and recently launched a series of training courses to assist member rural banks to provide money-in and money-out services as well as facilitate the distribution of Smart Money instant cards to rural bank customers in the countryside. The benefit of the Smart Money card is that it is an ATM and MasterCard Debit card linked to a Smart Money wallet.
“With these partnerships, we expect that we will continue to see a significant uptake in mobile money-enabled banking transactions in the years to come” said Pama
“We thank the support of our Telecom partners, Globe and Smart Communications, and the support of USAID [United States Agency for International Development] for the RBAP-MABS [Microenterprise Access to Banking Services] program which has helped us to make this dream a growing reality,” he added.
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