2018 Philippines Business Awards

8 APAC / 2018 Philippines Business Awards , Capitalising on High Mobile Penetration to Offer Financial Services in the Philippines , 1 Due to the high percentage of the unbanked population, cash rather thanmobile transaction remains the most popular consumer payment instrument in the Philippines, says leading data and analytics company GlobalData. According to GlobalData’s latest report, ‘Mobile Financial Services in Asia-Pacific: Telco Service Portfolios and Positioning Strategies’, the Philippines had a mobile penetration of 115% in 2017. Globe, one of the country’s leading telecom operators, is taking advantage of this penetration gap by offering innovative financial services to anyone with a mobile number. In addition, an analysis of the payments landscape in the Philippines by the company in 2017, revealed that only 36% of the Philippines population held a bank account and payment card penetration (payment cards per person) was only 60% compared to China’s 480% in 2017. On the other hand, more than 69% of Filipinos used a smartphone, surpassing the number of payment cards. Malcolm Rogers, Technology Analyst at GlobalData, says: “This is mainly due to inadequate banking infrastructure, limited public awareness of electronic payments and low acceptance of payment cards at merchant outlets.” Sensing a massive opportunity for financial service products like payments, savings and loans, Globe launched its flagship service Gcash, which allows users to send money to anyone in the country using only a mobile number. Globe’s Gcash is enabled by several key partnerships, including AliPay, Ayala Corp and MasterCard. Ant Financial, the international arm of Alibaba’s Alipay, acquired a 45% stake in Gcash in late 2017, and has since helped the company roll-out QR code based payments. These payments make P2P and merchant transactions even simpler. Starting in 2017, merchants at all Ayala malls across the country began accepting Gcash as a form of payment. This greatly expanded Gcash’s list of participating merchants. Under another partnership with MasterCard, Gcash customers can use a virtual debit card for online purchases from merchants outside of the Gcash merchant network. Gcash offers small personal loans to its customers through sister subsidiary, FUSE and a product integrated with Gcash, called Gcredit. Gcash also offers a business product called ‘Power Pay’ that enables small businesses to accept QR code based payments, run employee salary disbursements and even extend employees payday loans. More recently, in partnership with Alipay, Globe has launched instant remittance service from Hong Kong using Blockchain. Remittance service is important for the Philippines, where international remittance accounted for 10% of GDP in 2017. Rogers concludes: “Through these partnerships, Globe’s Gcash has been able to add real value for users and make headway in the Philippines payments market. Gcash’s 5.1 million users at the end of 2017 puts it in competition with Mastercard and Visa, which each held around seven million debit card users in the Philippines at end of 2017.”