By Christine Joyce S. Castañeda, Senior Researcher
“Simple lang. Maasahan”
This is the tag line of Philippine Savings Bank (PSBank), which has been doing business for more than 50 years. In line with this, the thrift banking arm of Metropolitan Bank & Trust Co. (Metrobank) formally launched its “PaSend” service in late June.
The fund transfer service allows the Bank’s clients to send cash via the PSBank mobile application at a “minimal cost.” According to PSBank, the sender can remit for as low as P200, in multiples of P100, to as high as P5,000 per transaction. The allowed maximum amount to be transacted for the day is P30,000. On the other hand, one can receive a minimum of P200 to a maximum of P15,000 per day and a maximum of P50,000 per month.
The service is among the initiatives geared towards servicing the unbanked segment of the population. Results of the Bangko Sentral ng Pilipinas’ Financial Inclusion Survey conducted in 2017 show that only 22.6%, or around 15.8 million Filipino adults, have accounts in formal financial institutions.
With this in mind, BusinessWorld sought out PSBank Senior Vice-President and Marketing Group Head Emmanuel A. Tuazon to discuss the cash transfer service, how it started, and how Filipinos will benefit from it. Below are excerpts of the interview:
HOW DOES PASEND WORK?
PaSend is an innovative mobile remittance service that enables PSBank depositors to conveniently send cash instantly, 24/7, to family, relatives, and friends through the PSBank mobile app. The cash may be withdrawn by the intended recipient from any PSBank or Metrobank ATM. The PaSend service is competitively priced compared to other domestic remittance platforms, and does not require the recipient to have an account with PSBank. As such, it will also be of benefit even to unbanked Filipinos or those who don’t have deposit accounts [that] need to mobilize funds in the form of cash.
WHAT ARE THE MAIN ISSUES THAT PASEND AIMS TO SOLVE?
• Constraints in terms of time and location in sending money (e.g. transactions can only be made during operating hours and days of banks or other remittance service companies)
With PaSend, PSBank depositors may conveniently send cash instantly and anytime to family, relatives, and friends through the PSBank mobile app. Both PSBank and Metrobank have over 1,000 ATMs strategically located nationwide, thus accessibility is well-addressed.
• Complex or tedious process associated with sending money (e.g. filling out of long, multiple forms)
With PaSend, clients simply need to access their accounts via the PSBank mobile app, select the PaSend module, indicate the amount, and provide very minimal information. After a secure validation process, the Bank approves the transaction request and will automatically send a one-time system-generated six-digit PIN (PIN2) to the intended beneficiary’s mobile number, together with the remittance amount specified by the sender. To complete the transaction, the sender will have to share the one-time self-nominated four-digit PIN (PIN1) to the beneficiary who will then have to go to a PSBank or Metrobank ATM to get the cash via PaSend or the card less withdrawal option.
• High transaction fees in sending and receiving money across the Philippines (e.g. transaction fees depend on the amount sent and the location of the beneficiary)
PaSend only charges a minimal fee of P25 per transaction. An additional P7.50 will be collected from the sender if the beneficiary withdraws the funds from a Metrobank ATM. All fees are charged to the account of the sender.
• For some remittance platforms/services, a bank account of a beneficiary may be required.
The recipient or beneficiary does not need to have an account with PSBank for the sender to send money.
The multi-factor authentication that comes with every PaSend transaction makes every stage secure and reduces fraud risks significantly. The PIN that will be used to withdraw cash from the chosen ATM is a combination of PINs provided by the sender and the system-generated PIN from the bank side. PaSend allows the ability to track the money sent — via SMS notifications — which alert the sender if the beneficiary has been advised of the transaction, and/or has proceeded with withdrawal of the funds.
WHO IS YOUR TARGET MARKET?
Always-on and highly-mobile individuals who see time as a precious commodity, and who prefer to transact with their bank at their own convenience. The unbanked market is likewise tapped considering their inclusion in the ecosystem of sending money where the sender has an account and mobile app with PSBank, and the beneficiary (not having an account) simply gets the money from any PSBank or Metrobank ATM.
WHAT IS THE VALUE PROPOSITION OF THIS SERVICE?
The primary value proposition is the simplicity of PaSend’s process which enables convenient cash remittance between two parties. Further, the sender can send anytime (24/7) conveniently through the PSBank Mobile App; the beneficiary just needs to go to the nearest PSBank or Metrobank ATM to withdraw the funds. He/she does not need to have an account with PSBank to be a recipient of the funds and; relatively economical for the sender — it currently has a fixed transaction fee regardless of amount sent.
IS THIS THE FIRST OF ITS KIND AMONG BANKS AND YOUR PEERS?
The process of sending money via different platforms has always been there in the market. What differentiates one from the other, apart from pricing, is the convenience and simplicity by which it is done — no forms to be filled up, highly accessible with cash being withdrawn via the PSBank and Metrobank ATMs; and reliability of service. Those create differentiation.
HOW DOES PASEND COMPARE TO THE SERVICES OF REMITTANCE COMPANIES? WHAT DO YOU THINK IS ITS EDGE COMPARED TO PLATFORMS PROVIDING A SIMILAR SERVICE?
PaSend enables the ability to send money to family, relatives, and friends anytime via the PSBank mobile application. It is designed primarily for relatively low value transfers that need to be received instantly in cash. The recipient of cash does not need to have an account with PSBank to be a beneficiary. Currently, PSBank adopts a fixed-fee pricing (regardless of amount) at P25 per PaSend transaction.
WHAT ARE THE VITAL PREPARATIONS/ARRANGEMENTS THAT THE BANK HAS MADE TO ENSURE THAT SERVICES ARE SUCCESSFULLY AND PROPERLY RENDERED (IN TERMS OF TECHNOLOGY, BACK-OFFICE, ETC.)?
As part of its preparations, the Bank secured approval from the Bangko Sentral ng Pilipinas (BSP) to offer the PaSend service to its clients last November 2018.
The bank also ensured 100% compliance and adherence to the BSP’s Circular 950 [i.e., the amended guidelines for banks in carrying out anti-money laundering procedures, which allows a “risk-based” approach to existing know-your-customer (KYC) rules] on remittance as well as other applicable circulars of the regulators.
The bank continuously works to consistently offer a seamless experience for both customers and internal users, which includes validating system UI/UX (unit interface/user experience design). The system has likewise complied with and underwent scrutiny from our Information Security Teams.
HOW DO YOU SEE PASEND CONTRIBUTING TO THE BANK’S BUSINESS? DOES THIS ALSO OPEN OTHER BUSINESS OPPORTUNITIES FOR THE BANK? IF YES, WHAT ARE THESE?
PaSend contributes to the Bank’s business in terms of fee income generated from the service fee but more importantly, this service allows us to strengthen our relationship with the customer as he finds his banking requirements met by the Bank. Exceptional customer experience has been the commitment of the Bank, and together with the proper use of technology to drive innovative services, this makes us the preferred bank of our customers.
We hope as well that the beneficiaries/recipients of the PaSend transactions will realize how differently we do things in PSBank; and will trigger them to consider opening up relationships with us — deposits, loans, investments.
IS THERE A PARTICULAR RATIONALE THE BANK WANTS TO ACHIEVE THROUGH THIS OFFERING? WHY TAP THE UNBANKED SECTOR?
PaSend is part of the bank’s digitalization initiatives. We are guided by the principle of keeping things simple and reliable — our brand promise.
PaSend also forms part of the bank’s initiatives that are in support of the BSP’s Financial Inclusion Program. Necessarily, given the PaSend design where beneficiaries need not have deposit accounts to be a recipient of a sender, the unbanked market is made part of the ecosystem for PaSend.
HOW DO YOU SEE USER TRACTION FOR PASEND?
We have had very promising figures since our launch last June 5, 2019. We expect it to increase as we intensify efforts on awareness and promotions in the coming months. We need to be able to educate the target market on how and in what situations PaSend can be most valuable to them.