“BELIEVE it or not, there are more live SIM cards in the Philippines than there are Filipinos,” G-Xchange Inc. CEO Albert Tinio said when faced with the gap in statistics on Filipinos who are either underbanked or unbanked. Three out of four Filipinos don’t have a bank account. 40 percent of people in municipalities and cities in the Philippines do not even have access to banks.
Only 5 percent of Filipinos have credit cards. Tinio acknowledges this problem and said that while this is true, while many don’t have access to banks, practically everybody owns a phone and has an access to mobile and telco. “Everybody has a cell-phone and telco is there everywhere. Telco has penetration and is able to channel financial services.” To date, there are 118 or 120 million live SIM cards in the country and that is something that a Fintech company helmed by Tinio is making sense of.
Cashless transaction at a speed of a text message
THE FinTech giant CEO is talking about GCash, a pioneering mobile payment system that turns the now-and-ever ubiquitous mobile phone into a virtual wallet. Using GCash, you can pay for items and send money at the speed of a text message.
Like practically all platforms of its kind, GCash weans one off bulk and paper, making transactions otherwise traditionally processed with notes cashless. With GCash, one can buy load for anyone on any network, and anytime he needs (with an instant 4-percent rebate every time one purchases a Globe or TM load).
One can, moreover, send money and transfer funds anywhere he finds himself in the Philippines, spending zilch on service fees. One can also pay bills via GCash and skip the long lines and what arduous processes. With GCash’s partnership with American Express Virtual Pay, a virtual card linked to a GCash mobile wallet, you can splurge on international shopping, gaming and entertainment sites sans the physical card.
At the top of it all, you can withdraw from PayPal by linking your PayPal account to GCash and transfer your PayPal funds gratis.
“Many Filipinos are freelancers and contract jobs abroad. Many do clerical works, some medical transcriptions but they do these online. These OFWs, or online Filipino workers, get their salaries through PayPal,” Tinio said. “Unfortunately, when they get their money that way, they have to link their PayPal account to their bank accounts so that it becomes actual cash. But it takes time to convert that money and you have to pay a price. What we did was we work with PayPal so that you can now link your GCash account to your PayPal account.”
GCash also has corporate accounts, small companies (SMEs) who make use of GCash as a disbursement platform for their employees’ salaries. And, yes, you can also pay your tax via GCash. But how do you get money into the account?
You may liken it to a bank, where you go to a teller and deposit money into your account. But G-Cash isn’t a bank. It’s an electronic money issuer (EMI), wherein you top it up by going to one of G-Cash partner outlets like convenience stores such as 7-11 or over-the-counter in pawnshops like Cebuana Lhuiller and Villarica, and malls. You can also top up via a bank linking your G-Cash to your BPI MVES account.
From cash to card
WITH FinTech products like this, the projection of the end state is going to be that one doesn’t have to carry physical money because it’s going to be all electronic. It’s happening; things are made easier right now because everything is digital. Anything that has power and has a chip will eventually be connected to the Internet of things. Because, seriously, who wants to keep their wallet with cash that is either bulky unsanitary and risky because it has no trail?
But GCash is just an addendum, an extension, because, in the Philippines, cash is still king. The goal, according to Tinio, is not to kill cash.
“Electronic money will always be safer, convenient and easy, but what we advocate is financial inclusion. The question should be how long will it take to get everybody in.”
According to Tinio, transitioning people from cash to card entails education and the need for them to experience it.
“FinTech is in its infancy stage; it is a huge pie, Tinio said, and only a small portion of the pie is being addressed. There has to be more players to spread the news,” Tinio said.
“The more people who come in and address the genuine issues, the easier and quicker it is for Filipinos to adapt.”