Money transfer agencies can optimize operations and cost by integrating technology to their services, a California-based online mobile payment solutions firm said.
Frederic Ho, Jumio Corp.’s vice president for Asia Pacific division, told the BusinessMirror that financial technology (fintech) is easing the cost and process of cash remittance for both the firms and customers.
“By integrating technology and moving online, money transfer agencies will be able to reduce their overhead costs, as well as the cost of transferring cash — thus being able to lower fees,” Ho said.
With digital identity verification and certified “liveness” detection, customers are also ensured that money were transferred to the actual receiver, he added.
Ho said that online transactions reduce the time it takes to remit money as customers do not need to visit physical branches anymore.
“Some of the biggest pain points for users of traditional remittance include high transfer fees, long wait times for transfers to reach their destination, as well as the restriction of only being able to transact at a physical branch,” he said. “This makes money transfers a huge hassle, both for Filipinos working overseas where travelling to a branch is not convenient, as well as for recipients who may be residing in remote places in the Philippines.”
Philippine Payments Management Inc. recently reported that electronic money transfers coursed through InstaPay in April rose by 32.18 percent to 8.86 million from 6.71 million the previous month amid mobility restriction due to the pandemic. In value, transactions reached P53 billion, averaging at P6,128 per transfer.
IN Southeast Asia, fintech industry has been growing over the past decade and is seen to continue its momentum, Ho said. The sector registered P1.7-billion inflows from 2018 until the first of 2019, which showed a six-fold increase from 2017 figures.
The region has approximately 198 million unbanked adults, he said, noting that this represents a potential market.
According to BSP’s 2017 Financial Inclusion survey, 52.8 million or 77.4 percent of the total population remain unbanked. The Central Bank earlier vowed to double its financial inclusion efforts, eyeing 70 percent of the Filipinos to be banked with formal accounts by 2023.
With this, Ho said that the Philippine can participate in the growth of the fintech sector.
“The large unbanked population, combined with a high level of digital literacy and mobile adoption creates perfect conditions for Fintech to flourish in the archipelago,” he pointed out.
Apart from start-ups, the Jumio official said that traditional banks can leverage fintech to boost financial inclusion, beef up portfolio and future-proof their business. But Ho stressed that internet accessibility should be widened in the country, including rural areas, to allow many Filipinos accessing fintech services.
Meanwhile, he said that fintech players should be able to have strong security measures to prevent fraud and data privacy attacks. This can help boost customer confidence as well to the fintech platforms and their services, he added.
“Fintech is helping to drive change within the entire banking and finance industry — through the entry of new players in the market, as well as the transformation of traditional incumbent banks,” Ho said. “These changes will eventually lead the whole industry to a ‘new normal’, where financial services can be provided to the vast majority of Filipinos in a seamless and simple way.”