CARLOS KORTEN, the Filipino-American CEO of Pasig & Hudson Consulting, has “green blood” running through his veins.
As a Boston Celtics fan, he said the National Basketball Association’s (NBA) Eastern Conference franchise had a strong influence on him in his childhood days. He grew up in the state of Massachusetts during the halcyon days of the 1980s triumvirate of Larry Bird, Robert Parish and Kevin McHale.
(The Celtics are currently competing against the Milwaukee Bucks for the first round of the 2018 NBA playoffs.–Ed.)
“Those teams were hardworking, talented and motivated. The star players were role models for me very early in life. [They taught me ways] to compete with grace, collaborate and fight. The current incarnation of the ‘green-and-white’ team is a special fascination for me,” Korten revealed in a recent interview for the BusinessMirror’s Envoys&Expats.
He is also vocal about his praises to Celtics General Manager Danny Ainge for recruiting very young players who fit the team’s vision. According to Korten, Ainge’s willingness to act on the strength of his own convictions is inspiring: He traded his star players and the top draft pick, then signed no-name players from other teams and overseas—even against the popular opinion of his own fan base. In the long run, Ainge can take credit for assembling a potent young club that remains one of the dominating teams in the NBA.
Moreover, Korten also admires Head Coach Brad Stevens for his intellect, personality and brilliance. As a natural leader and gifted teacher, Korten lauds Stevens’s ability to motivate his team through active communication grounded in deep, mutual respect without berating or browbeating them.
“It is a model that I want for leading my own team. As for the [members themselves], they are hardworking, talented and diligent. They care deeply about each other and play with heart and selflessness,” Korten explained.
How it started
IT was the passion influenced by the Celtics’ tradition that the alumnus of the University of Chicago decided to leave his comfortable executive job in New York to start a new company.
“It was with the idea to bring everything to the Philippines [everything I had learned through more than] 25 years of working in the payments industry. [It was here] where my mother was born and raised and before [she emigrated] to the United States as a young woman in the 1970s,” Korten explained.
Currently, the Philippines is on the radar of investors because of its strong growth fundamentals and development being felt everywhere. Furthermore, the Internet Age favors the country as it draws employers to its enormous, young, hardworking, English-speaking and digital-ready labor force. Disposable income is on the rise. New products and services are appearing to support a new emerging middle class.
Nevertheless, the country remains a laggard in payments technology. Cash dominates the market. Credit card penetration in the country is very low. Consumer engagement with retail banking is poor. Fees for domestic remittances are very high.
“This is a promising market for the type of business my company is chartered to do,” the Pasig & Hudson Consulting CEO pointed out.
“So, although many of my friends and family were surprised and astonished, I moved from New York to Manila in late 2014 with the idea to launch a business in the Philippines, for the Philippines,” he added.
Digital commerce company
IN 2014 Korten formed Pasig & Hudson Consulting, which combines the names of the two rivers that traverse Manila and New York City, respectively. The waterways were used as Old World analogies for commerce and trade in the digital era.
The firm combines decades of practical experience, building world-class systems for major banks and credit-card companies around the world that include American Express, GE Capital, Bank One, Barclaycard and Citizen’s Bank, with handpicked entrepreneurs from Manila who bring deep local market knowledge of the Philippines.
The company’s primary objective is to bring world-class payment technology with tried and true business practices to markets that have been chronically underserved by the major multinationals. The Philippines is its first market.
Why gift cards?
IN the Philippine retail sector, Korten cited a few mega-retailers offering modern, reloadable gift cards. Similarly, an international coffee brand has an incredibly popular and successful product that is especially strong with young, aspirational Filipinos.
But beyond that, for most businesses in the country, paper gift certificates still remain “state-of-the-art.”
When Korten and his cofounders considered the landscape, they knew right away that the Philippines is where they wanted to compete.
“We did not invent the private-label gift card. That is a tried and true business practice that has withstood the test of time in markets around the world,” Korten explained.
“Our core product is not a fad or a gimmick. Gift cards work. They create sales,” he pointed out.
Introducing Gifmo
KORTEN expounded that many merchants around the world are facing challenges in rolling out modern gift cards because of the dearth in resources or payments acumen to launch a gift-card program on their own, because the programs are technically, operationally and fiscally complex.
For Pasig & Hudson, it is simple because their product Gifmo deploys a world-class gift-card platform as it shares costs across a large portfolio of clients.
“We are able to reduce costs to a point where even a small business with a single store can run their own profitable gift-card program,” the CEO articulated.
Gifmo combines the company’s proprietary card-processing software, dedicated back-office operations and business consulting services to help businesses in the Philippines launch their own gift card and digital loyalty programs. That explains the invisible infrastructure that powers their clients’ cards.
“Gifmo is designed to be the digital marketing engine that [will power] businesses all across the Philippines. We will replace all paper gift certificates where they still exist in the country. We will shift consumer marketing in the Philippines away from paper coupons and printed loyalty punch cards to mobile phones and the Internet,” Korten emphasized.
Preparing for launch
KORTEN has tapped former American Express colleague Cory Moreira for the Gifmo project. He pitched Gifmo to Moreira premised on a “bring-your-own-device” model to reduce setup costs and to power a carefully crafted user experience over a proprietary closed loop.
“[I walked] him through the four application programming interface services we would need to ship a minimum viable product,” he said.
“Thanks to [Moreira], the ‘bones’ of our proprietary technology are best-in-class. Secure and encrypted, high-performing, payment card industry-compliant, built-in failover and [digitally] optimized, our tech platform was designed using high standards of software development that we had at American Express for our baseline,” Korten recalled.
Pasig & Hudson was incorporated in June 2015. The first Gifmo cards went on sale August 22 of that year. Marmalade Kitchen, a bistro in Bonifacio Global City, was its beta partner.
Pasig & Hudson’s core team was then composed of Korten himself, two Americans, two Filipinos, a family friend and a talented designer.
Expansion beyond PHL
STARTING 2017 and in the next few years, Pasig & Hudson will be promoting Gifmo in additional regional markets: Singapore, Hong Kong, Malaysia, Taiwan, Thailand and Indonesia.
Since the core of Gifmo is technology and operations, it can be virtualized and delivered to additional countries with superior margins. Korten has it that groundwork has already started to make this achievable.
Since its inception, Pasig & Hudson has raised $1 million in capital from multiple private investors.
Korten stated, “We are open to speak with new investors who are interested in learning more about our business.”
We’ll wait for the day when Gifmo could buy us front-row seats in big-ticket local sporting events and, who knows, even at the Boston Garden to witness an injury-free Kyrie Irving weave his magic for the Celtics.
After all, the color of cash is said to be green—the same which runs through Korten’s veins. And his Gifmo gift card could very well be the four-leaf clover for the global gift-card industry.
Image credits: Jimbo Albano