Instant payment system Higala looks to boost rural banks’ online transactions
INSTANT PAYMENT platform Higala is looking to increase the share of rural banks’ transactions via InstaPay through cheaper onboarding and transaction fees, its top official said.
Higala, which was launched last week, is owned by Talino Venture Studios and Chemonics International.
The platform aims to onboard 100 financial institutions, with a particular focus on rural banks, by the end of 2024, Talino Venture Studios Chief Executive Officer Winston Damarillo said at the launch event on Thursday.
Higala has already partnered with the Rural Bank Association of the Philippines, he said.
“Despite the presence of 400 rural banks in the Philippines, only a mere 18 are part of InstaPay. This highlights a significant challenge: the lack of interoperability among these banks. As a consequence, the full potential of financial inclusion remains largely untapped, depriving many Filipinos of the benefits that modern banking technologies can offer,” the company said.
Higala targets to offer lower transaction fees with the help of an open-source software called Mojaloop, it said.
“In terms of switching fee, we cannot yet disclose the final pricing, but we’re definitely lower than what the market is offering,” Mr. Damarillo said.
“If you’re a rural bank with P50 million in capitalization, why spend that 50 million in tech when you can use it somewhere else? It’s very costly,” he added.
Higala aims to offer a switching and transaction fee of below P1 and an on-ramp fee of near zero.
“If we do that, we are now going to be among the cheapest in the world. Right now, we’re one of the most expensive,” Mr. Damarillo said.
This is in line with the central bank’s ongoing thrust to lower transaction fees to boost online payments, he said.
“We want to ensure that everyone is fully banked by lowering the bar of obtaining bank accounts, lowering the friction cost for digital payments, encouraging merchants to accept them, and empowering all financial institutions to be able to provide it to their constituents, especially rural banks,” he added. — AMCS
