PH Remittance further widens Fintech Horizonby Tom Noda February 19, 2018
Once again, remittances from overseas Filipinos surpassed its year-on-year record, giving a wider horizon for financial technology (fintech).
The Philippine central bank or Banko Sentral ng Pilipinas (BSP) announced last Thursday, February 15, that cash remittances of overseas Filipinos increased 4.3 per cent to $28.06 billion, while personal remittances grew by 5.3 per cent to $31.29 billion, exceeding government target of 4 per cent.
Personal remittances last year represented 10 per cent of gross domestic product (GDP) and 8.3 per cent of gross national income (GNI), the BSP report added.
This yearly growth on remittances is definitely keeping industry players on their toes. Here’s a recap of the local remittance services business in the Philippines done by industry leaders for the past two years.
In less than two years, microfinancial company Cebuana Lhuillier has dramatically boosted its remittance business. It strengthened its domestic services by growing its network of partner agents, a network of trusted bank and non-bank entities all over the Philippines, and partnered with Bayad Center which added 250 transaction outlets making Cebuana to grow to over 2,000 branches nationwide.
Cebuana also expanded its international presence through its partnership with KEB Hana Bank (formerly Korea Exchange Bank), a financial institution based in Seoul, marking its first partnership with a South Korean bank. Cebuana likewise extended its tie ups with MoneyGram, and Xpress Money. The 30-year-old company even launched its own remit to savings account service accepted in over 50 banks, both foreign and local.
From a traditional one-service pawn brokering company in the 1980s, M Lhuillier has evolved into a “full-scale financial services company”. The newly appointed head of its financial services group Michael Lhuillier announced recently that M Lhuillier now does collections, disbursements for the government, bills payment, collections and cash distribution for companies that have sale forces running throughout the country.
“We have a huge domestic money transfer system—person-to-person, person-to-business, business-to-person service, on top of iinternational money transfers, insurance products, and of course the traditional money lending business,” Lhuillier said.
He noted they will soon launch an app that will allow people to send money. “You can do a cash-out from any ML branch, you can pay bills, and you can use it to buy load for your phone,” Lhuillier said.
M Lhuillier records over 1,600 branches and its new ML ePay service allows Coins.ph users to pay for Bitcoin with cash, at any of M Lhuillier’s branches nationwide. The company has also chosen Sendah Direct as its business reselling platform developed by mature fintech startup Ayannah.
Globe’s GCash, Mynt
Globe Telecom through its subsidiaries has taken an aggressive stance in the remittance business. Its mobile commerce subsidiary G-Xchange Inc (GCash) completed two strategic partnerships in the last five months. GCash on February 7 partnered with global money transfer and payment services firm MoneyGram. It is meant to allow millions of GCash users to receive money from over 200 countries and territories on their mobile wallet and use the funds instantly for purchasing goods and services online.
For MoneyGram, the collaboration aligns with its strategy to offer consumers more digital money transfer options. The Philippines now has over 30 million active smartphone users and ever-growing internet penetration. GCAsh is the micropayment arm of Mynt, the joint venture firm between Globe Telecom, the Ayala Corporation, and Ant Financial. Mynt provides fintech solutions to consumers, merchants, and organizations.
In September 5, 2017, GCash partnered with Hong Kong-based EMQ, a fintech startup that seeks to boost remittance services across the Philippines. The partnership allowed EMQ users to send funds to GCash account holders who in turn can use their mobile money to pay bills and make online purchases, buy load or cash out at over 12,000 GCash Partner Outlets across the Philippines.
PLDT’s PayMaya and PLDT Global
For over two years, PLDT has beefed up its presence in the remittance business through its financial services unit PayMaya Philippines Inc (formerly Smart eMoney Inc), and its international marketing and sales company PLDT Global Corp (PGC).
The latter partnered with US-based international remittance network UniTeller Financial Services last December 2015 to develop a mobile remittance app enabling Fil-Ams (Filipino-Americans) in the US to send money to their families in the Philippines. PayMaya, on the other hand, has been active in the promotion of its remittance brand Smart Padala, which it claims to be the world’s first international cash remittance service linked to the mobile phone. Smart Padala International and Domestic were launched in 2004, and 2005, respectively.
In September 12, 2017, PayMaya Philippines became part of Western Union’s remittance service portfolio in the country with a new service allowing Filipinos to receive funds via their PayMaya mobile wallet in addition to visiting a Western Union agent location to pick up cash.
Last January, PayMaya Philippines formally announced its new partnership with retail giant SM Store allowing shoppers pay for items at the department store with just their phones. PayMaya Philippines president and CEO Orlando Vea considers it a natural progression of their collaboration with SM as an early partner of PayMaya as a load-up center for its customers, as well as a valued partner of its Smart Padala remittance service.
Featured image via Pixabay