Mobile money interoperability in the Philippines took a step forward with the successful integration of the digital payments mobile app of PLDT and Smart Communications’ Paymaya Philippines with Globe Telecom’s mobile money service GCash.
The interoperability agreement is part of an initiative of the GSM Association (GSMA) and the Philippine Central Bank in making mobile money services more inclusive and accessible to more people in the country.
With the interoperability in place, users of the PayMaya app can soon send funds to users of other mobile money systems, including GCash, and vice-versa. This move is seen to boost the growth of mobile money usage in the country, and in turn, expand the local digital commerce ecosystem.
“This development comes on the heels of the launch of the National Retail Payment System (NRPS) Framework in December led by the BSP and fully supported by the industry, which aims to create a “safe, efficient, reliable, and affordable electronic retail payment system that is interconnected and interoperable,” said Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor A. Espenilla Jr. in a statement.
Aside from domestic remittances, GCash and PayMaya are also expected to collaborate on merchant payments, bulk payments, government-to-person payments (G2P), and person-to-government payments (P2G), among others.
“We are confident that more consumers would be more open to adopt mobile money services if they can send cash to anybody regardless of what mobile provider they are using especially if this means more efficient services and lower prices,” John Rubio, President and CEO of Mynt, a fully-owned financial services subsidiary of Globe, said in a media statement. Mynt is also the mother company of G-Xchange, Inc. which operates GCash.
Through Paymaya and GCash, customers no longer need to own a credit card or even have a bank account to make financial and e-commerce transactions.
Paymaya was launched in August 2015 as a virtual Visa card that resides in a mobile app, allowing people to purchase online, send money, send telco airtime load. Soon, it envisions to allow users to pay bills online and do other types of transactions. A physical card can be linked to the virtual card for use for purchases in physical stores and pay for train rides.
GCash, on the other hand, was launched in 2004 as a micropayment service of millions of Globe subscribers. It transforms a mobile phone into a virtual wallet for safe, secure, and hassle-free mobile money transactions such as the purchase of prepaid load, bills payment, money remittance, donations, online shopping, among others.
“This is a step toward advancing the future our digital economy. Interoperability is but a natural progression in the ongoing evolution of financial technology services in the country,” said Orlando B. Vea, President and CEO of PayMaya Philippines.
BSP Governor Amando Tetangco Jr. cited in an earlier speech that studies have shown that shifting from paper to electronic–based payment system could generate annual savings up to one percent of the country’s gross domestic product (GDP).
At present, there are 10 GSMA active operators with strong money deployments, three of which – Sri Lanka, Pakistan, and Tanzania, are already practicing interoperability since 2014.
Committed markets, on the other hand, include the Philippines, Paraguay, and Myanmar while Rwanda, Madagascar, Thailand, and Jordan already made a pilot launch last year.
The fifth annual ‘State of the Industry Report on Mobile Money’ released by GSMA during the Mobile World Congress in Barcelona, Spain showed that there are more than one billion mobile money transactions in December 2015.
The report noted that mobile money is available in 85 percent of countries where most of the population lack access to formal financial institutions. Moreover, there were 29 cross-border mobile money initiatives connecting 19 countries in 2015, with cross-border remittances growing 52 percent, by volume, over the last year.
“Mobile money is driving social and economic impact for millions of people in emerging markets,” said John Giusti, Chief Regulatory Officer, GSMA. “Over the last decade, mobile money has done more to extend the reach of financial services than traditional bricks and mortar banking were able to do over the last century. With 411 million mobile money accounts today, mobile is an increasingly critical platform for expanding financial inclusion globally.”