MOBILE BANKING

Mobile banking in the Philippines: Interview with Globe Telecom’s Rizza Maniego-Eala

Globe Telecom is a leading mobile network operator in the Philippines and is working with CGAP to create ecosystems or mini-economies with multiple locations for people to transact with GCASH, their mobile banking service, via SMS messaging. Through intensive marketing, targeted customer education, and rapid sign-up and accreditation of retailers, the project will bring mobile phone-based payments and money transfer services for the first time to three predominantly low-income rural provinces. A total of 80,000 GCASH users in the three pilot provinces are expected to be reached, with greater success than would otherwise be possible without CGAP’s support. Rizza Maniego-Eala, President of G-Xchange, Inc, Globe’s wholly-owned subsidiary running its m-commerce business with its flagship service, GCASH, explained in a recent interview that this is just the latest in a series of innovative efforts by Globe to expand financial services using mobile phones.
How far would you say GCASH has evolved in terms of developing ecosystems for mobile commerce?Today, GCASH has over 6,000 domestic outlets in the Philippines servicing our 1.9 million GCASH subscribers. Recently we renewed our partnership with The Rural Bankers Association of the Philippines (RBAP) to further expand existing mobile phone banking services of rural banks. Using the GCASH payment platform and developed with RBAP’s Micro-enterprise Access to Banking Services (MABS) program, the convenience of mobile banking, many rural banks are using GCASH integrated into their operations benefiting the bank by being able to reach more clients and provide an additional channel for accessing the various financial services offered.
We’ve also begun a pilot transfer program for Filipinos in Hawaii, Singapore, Hong Kong and the United Arab Emirates that allows them to send Western Union mobile money transfers directly to friends and family who are GCASH subscribers in the Philippines. The cross-border service supports low-principal and high-frequency remittances at much lower rates.
Describe the importance of pricing for the lower income segment of the market.In the Philippines, the greater portion of the population lives at or below poverty line. In spite of this, there are over 60 million mobile phone subscribers and around 98% are on prepaid services. GCASH benefits the lower income segments because it reduces the transaction fees and costs to send and receive money. GCASH requires only a mobile phone and a one-time SMS-based registration, with a minimal charge of U$0.02 (P1.00) per transaction. Subscribers can do their transactions at home instead of traveling several kilometers to rural banks to pay or do their banking transactions.
For those of us who are less familiar with the Philippines, describe the importance of remittances to the country, as well as to your business.The Philippines received international remittances worth an estimated $16 billion (this year alone) constituting about 13% of our GDP. The continued growth of remittances to the Philippines plays an integral role in the strength of the financial sector and our economy as a whole. The Philippine domestic remittance profile is also growing although it is quite tough to find third party data estimating the size of this market. As both international and domestic remittances form a large part of our country’s economy, we continue to look ways in which GCASH can provide low-priced, secure and easily accessible solutions for our growing merchant partner-base and various consumer segments.
What are the benefits of GCASH to your partners on the ground – banking agents?GCASH is all about convenience and lower transaction costs. For partner establishments, GCASH has the potential of reducing costs and promoting efficiency. Since transactions are electronic, their processing capabilities are automated thereby reducing manual handling and potential reducing back office costs. The reduction of operating cost could translate to increased margins, better value passed on to our partners’ customers, or both. Utilizing GCASH to help in our partners’ automation and increased access to more customers requires almost zero capital expenditure on their part.