With the almost perfect penetration rate of mobile carriers in the country and Filipinos’ long-time fondness and mastery of the art of texting, the Philippines was once tagged as the “texting capital of the world.” However, as mobile phone technology revolutionized, the usual “texting” capability has gone far beyond its functionality to include financial transactions such as mobile banking and mobile payments.
Like the “text” technology or what we technically termed as short message service (SMS), mobile banking and mobile payments are now widely embraced by Filipinos.
In fact, the 2012 Mobile Payments Readiness Index* commissioned by MasterCard revealed that the Philippines ranked second in terms of mobile-payment readiness in the Southeast Asian region. This means Filipinos are not only familiar with mobile payments, but frequent users as well compared to neighboring countries such as Malaysia, Thailand, Vietnam and Indonesia. At the core of this is the rural banking industry, the main proponent of mobile banking in the country.
Rural banks utilize the advantages of cellular phone-based banking in order to hurdle geographical barriers for the industry, and to deliver services to clientele in far-flung areas.
Information and communications technology research firm Gartner Inc. said that the Philippines is one of only two countries apart from Kenya that have successfully implemented mobile payment solutions in micropayments services to distribute money in far-flung areas.
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. They 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.
Expanding access to financial services for micro-entrepreneurs and other lower income groups, the Rural Bankers Association of the Philippines—with the support from United States Agency for International Development—launched the Microenterprise Access to Banking Services (MABS) Program in 1998.
The MABS Program provides training and technical assistance to participating rural banks in the Philippines to develop their capacity to profitably provide financial services, including loans, deposits, and money transfer services to microenterprises in the Philippines. In 2004, they have partnered with G-XChange Inc., a wholly-owned subsidiary of Globe Telecom, in the development and implementation of mobile phone banking applications and mobile commerce services for rural banks and their clients.
Rural banks can now offer electronically-driven financial services to clients in the comfort of their own homes that include Text-A-Payment for loan payment, Text-A-Remittance to transfer money locally and abroad, Text-A-Deposit for remote deposit mobilization, and Text-A-Withdrawal. Through these initiatives, we are providing a more secure way for clients to withdraw electronic money directly from their savings account to their mobile wallet.
*The MasterCard Mobile Payments Readiness Index is a data-driven, quantitative survey of the global mobile payments landscape. It gauges the readiness for mobile payments of 34 global markets, representing approximately 85 percent of the world’s household consumption expenditure, in three categories: Person-to-person, mobile commerce and point-of-sale.
Published in The Manila Times, 02 May 2013