RP eyes 28,000 mobile banking outlets

MANILA, Philippines - When all the mobile banking outlets are operational, the Philippines will have a cash-in, cash-out network of 28,000 located throughout the archipelago.

These cash-in, cash-out outlets will service the mobile banking public in receiving or sending cash, or making bills payments, or making balance inquiries. In short, making banking and banking services more accessible to the un-banked or under-banked.

These outlets act as manual automated teller machines (ATMs), which stood at 8,000 units as of end 2009.

The 28,000 outlets are actually made up of 3,000 closed-loop merchant network of the rural banks, the 15,000 cash-in, cash-out network of Globe Telecommunications Inc. (Globe), and the 10,000 Hapinoy outlets allied with Smart Communications Co. (Smart).

Globe and Smart are two of the leading telecommunications companies (telcos) in the Philippines.

Meanwhile, the Rural Bankers Association of the Philippines (RBAP) claims the branch network of 60 member banks operating 885 branches are presently the cash-in, cash-out centers, in partnership with G-Xchange Inc. (GXI), a commercial arm of Globe. GXI runs the GCash platform that offers mobile phone technology for financial and commercial products.

Based on data from the Bangko Sentral ng Pilipinas (BSP), there are at least eight million Filipinos using mobile phones to make bills payments and other banking related activities.

More than 50-percent of the country’s population have a mobile phone but less than 30 percent of the population have a bank account.

Mobile banking or the use of mobile phones for undertaking certain banking activities or transactions reduces the cost of moving money from one institution to financial institutions that in turn distribute or receive money from the banking public, and vice versa.

Developing countries like the Philippine definitely will benefit from a fully-operational mobile banking system since it is a country that is mainly rural in nature, and composed of 7,100 islands.

It has poor physical infrastructure, especially roads and transportation, that it makes going to banks costly.

It likewise makes millions of poor Filipinos have access to credit, to money send by their overseas relatives, or to simple bank transactions, without going to the banks.

Data from the telcos indicate that nearly 90 percent of their subscribers are pre-paid, that is, every so often, they must go to a store to buy “loads” to keep their mobile phones running.

Most of the sources of the “load” will soon be converted into the cash-in, cash-out centers.

Mobile phone banking transactions within the rural banking sector grew by 45 percent in 2009. Since 2006, the cumulative amount of mobile phone banking transactions in the accredited rural banks already exceeded P5 billion end 2009.

There are 6.8 billion people in the world and five billion are mobile phone users. It is estimated that the mobile money subscribers will grow to 360 million by 2012.

Mobile payment users globally are forecast to increase by 2.1 percent to 109 million by the end of 2010.

Total mobile payment transactions will total nearly 4.5 billion in 2012, up from just 125 million in 2007, growing at an annual compound rate of 105 percent.

The Asia Pacific region has taken the lead in bringing the globe to economic recovery. And it seems that it will be the same in terms of developing mobile technology for e-commerce and mobile e-payments.

China, which has more than 730 million mobile phone subscribers, is taking mobile payment services very seriously. The leading telcos are forming alliances with banking institutions to bring mobile e-commerce to new heights.

In South Korea, 97 percent of its population owns a mobile phone according to Reuters.

Data from the Bank of Korea showed average daily money transfer via mobile banking grew five-fold between 2005 and 2009. Total mobile payment transactions are estimated to reach 4.5 billion in 2012, up from just 125 million in 2007, growing at an annual compound rate of 105 percent.

Reuters also reported that India’s top mobile operator, Bharti Airtel, has conducted a pilot mobile banking project with leading state lender State Bank of India.

India’s Reliance Communications also has a business tie-up with HDFC Bank allowing HDFC customers to access their account details through Reliance mobile phones.

The report said that In emerging markets, mobile access to banking services is a very significant opportunity going forward in emerging markets.

“Mobile banking is not so much of a developed market proposition because developed nations all have personal computers and do telephone banking. But in emerging markets, mobile access is a good way of extending banking access,” it added.

Kenya accounts for over two million mobile money transactions per day, while Tanzania has over one million mobile money users. Mobile banking not only solves traditional payment problems for rural users, but it also enables low cost micro-finance transactions.

It may also be another avenue for microinsurance.