Group to launch cellphone-activated e-cash card

Three of the country’s leading companies in their respective fields have set their sights on the P2-trillion market for personal consumer purchases by introducing the country’s first and only reloadable electronic cash card that works with mobile phones.

Smart Communications, Inc. has entered into a partnership with MasterCard, one of the world’s leading payment services providers, and Metro Pacific Corp. – affiliate 1st eBank, said to be the country’s mobile and Internet banking leader, for the introduction of ‘Smart Money,’ an electronic cash card which Smart cellular phone subscribers can use to pay for even the simplest purchases such as those made from tiangges, movie houses, fastfood shops, school cafeterias, and in the future – public utility vehicles. The Smart cellular phone serves as the access and transmission devices.

Smart president and chief executive officer Napoleon Nazareno said the company has invested an additional P280 million for this venture, most of which went into the systems and technologies involved, but expects to earn as much as P300 million on the Smart Money’s first year of operation. The earnings will bascially come from /Smart’s share in the merchant’s discount (shared with MasterCard) as well as sales of airtime.

At present, of the P2.2-trillion total personal consumer expenses of some 76 million Filipinos, only P800 billion is being channelled through electronic payments such as credit cards. This method of paying is only six percent of total personal consumption, while the balance or 94 percent is still through cash or cheques in key urban cities, Danilo Ibarra, Smart’s E-Services/Smart Money head, said.

Smart Money will be acceptable immediately in over 13,000 establishments all over the country that already accept MasterCard. In addition, Smart will be fielding card swiping terminals, in outlets that are used to accepting cash because the purchase values are small. Already, Smart has fielded around 1,000 additional terminals, mostly in tiangges, probably to take advantage of the Christmas shopping rush.

Smart officials said the product can be a very powerful business-to-business (B2B) transactions tool. The company has already tied up with industry giant such as San Miguel Corp., RFM Corp., Unilever, Procter and Gamble, PepsiCo., Cosmos, among others, so that collections by the companies’ sales personnel can be remitted through Smart Money.

In addition to having a Smart cellphone, one needs to open an account with accredited banks such as 1st eBank, MetroBank, I Bank, EastWest Bank, Union Bank, Equitable PCIBank, Export Bank, Security Bank, Global Bank, Planters Bank, Premier Bank, and Dao Heng Bank, enrol the deposit account with Smart Money, and then transfer the cash value (P500 to P10,000) to the cash card through the cellphone.

One can do remote purchases (use the cellphone to order and pay for a pizza home delivery) and transfer money from one Smart Money card to another.

Nazareno said Smart Money can be a powerful stimulant to the growth of electronic payments in the country, that will benefit consumers, retailers, as well as so-called e-tailers or Internet merchants who are looking for a secure electronic payments system.

For his part, MasterCard country manager Jose Rene Villareal said they are now working on a virtual MC card which can be used to make transactions over the Internet.

Villareal noted that there had been attempts to introduce cash cards in the country, such as one by Bankard-PCIBank, but there was limited recognition of the product. "In this country, hard currency is still the way to pay. That is why there must be an effort to push it," he said.