By Anna Gabriela A. Mogato
WITH Chinese internet giants Ant Financial Services Group and Tencent Holdings, Ltd. seeking to expand into the Philippines, experts predict a spike in the use of mobile financial services.
In its report on Wednesday, Fitch Solutions Macro Research said that the increased presence of Tencent and Alibaba Group affiliate Ant Financial in the Philippines through local investments should mean better coverage and quality in the near future, spurring more Filipinos to adopt mobile financial services.
This comes after PLDT, Inc. announced a $175 million investment by Tencent and KKR & Co. Inc. in Voyager Innovations, PLDT’s fintech subsidiary. PLDT noted that this would further improve Voyager’s reach and operations.
“We are positive of the investment in deepening penetration of digital payments in the Philippines, and the addition of a strategic and well-experienced foreign investor in Tencent will improve the quality and reach of services,” Fitch Solutions Macro Research said.
Meanwhile, Ant Financial has made landfall in the Philippines through a stake in Globe Telecom-backed Mynt. With China’s two internet giants now in the country, Fitch Solutions Macro Research believes “competitive pressures are certain to ramp up.”
Tencent “will likely resort to aggressive subscriber acquisition strategies […] to gain dominance, although these promotions will continue to erode the already razor-thin margins on its transactions,” the report found.
Fitch Solutions Macro Research also predicts a tie up between the WeChat Pay service and Smart Padala to entice Overseas Filipino Workers in China and Hong Kong to use their platforms.
“Mynt, on the other hand will continue to leverage Lazada, which Alibaba owns, to drive its subscriber growth,” the report said.