During his visit to the Philippines in October last year, Chinese billionaire Jack Ma rooted for the country’s transformation into a “cashless society.” But while transitioning seems to be a good move for the Philippines, the reality is that the country still has a long road ahead before fulfilling the vision.
For Lito Villanueva, managing director of FINTQnologies Corp., who entered the fintech space in 2007, the Philippines is poised to become a “cash-light society” where people minimally use cash while utilizing digital means of payment.
The reason for this, he said, runs deep through Filipinos’ way of handling money.
“For us to be able to push for a cash-light or cashless society, it’s cultural and at the same time behavioral,” he said in panel discussion at QBO Philippines, Makati City last May 8.
His first order of business at Smart was spearheading its international mobile financial services. With him at the helm, Smart developed and launched “Smart Mobile Money Transfer,” allowing users to send money using their mobile phone outside the Philippines and vice versa. This venture is among the telecommunication giant’s projects aimed at innovating ways of providing financial services to Filipinos. Another one is Smart Money, which despite being present in as early as 2000, has still yet to generate more users.
He explained, “A lot of Filipinos would still put their savings under their mattresses. There are still a lot of Filipinos who are not into mobile banking.”
Villanueva said the key to “accelerate inclusive financial growth” in the country is “awareness” among common Filipinos such as farmers, vendors, and drivers.
A good start in doing so, he added, is to introduce the concept of “sachet banking” that involves sari-sari stores (neighborhood sundry store) in providing anyone with insurance or investment plan with just as low as ₱15 using mobile phones.
“In emerging markets like the Philippines, such a sachet marketing is the key towards success,” he said.
Still, Villanueva believes that the country is bound to become a cashless nation as many fintech businesses eye expansion in the region.
“There is the proliferation of the likes of PayMaya, GCash, Coins.ph, and you could see now that there [is] a huge influx of fintech players going into the Philippines. In fact a lot of foreigners who are fintech advocates are now going to the country to start a business because there’s a huge opportunity for everyone in the country today
For Robertson Chiang, chief operating officer of online payment provider DragonPay Corporation, moving to a cashless society is “not a necessity.”
Fintech platforms are not new to the Philippines, with established companies like Globe Telecommunication running GCash and Mynt and Smart having Lendr and Fintq as part of their business. But Chiang said the country is still waiting for a “killer app” that will commonize the use of fintech platforms among Filipinos.
“Logic would dictate that somehow all of us eventually will be going to that cash-light setup. As to how long that will happen, it’s really difficult to say,” he said.