Rural banks expand mobile phone banking in the countryside

Rural banks expand mobile phone banking in the countryside

APARTNERSHIP between telecom firms and rural banks in providing financial services to more Filipinos is expected to reach new heights with the development of newer technologies and acceptance of mobile banking in the countryside becoming more prevalent.

Many expect mobile money transfers (MMT) to boom over the next three years as the cost and ability to send money and pay for basic goods and services are cheaper and more efficient than the traditional modes. Globe Telecom subsidiary G-Xchange and the Rural Bankers Association of the Philippines (RBAP) are now working together to expand mobile banking services and provide a wider array of financial services. RBAP is also working with Smart Communications to enable MMT via the Smart Money platform and eventually mobile phone banking services for Smart subscribers as well.

While MMT is a very useful service for remittances and payments, the real potential comes from combining these platforms with a bank to offer real mobile phone banking services that make it easier for people to save, borrow, repay their loans, pay bills, facilitate rural payroll, or send or receive remittances. With more than 2,700 branches and other banking offices and more than five million clients, the rural banks are in the best position to provide the largest bank network partnership in the countryside.

With the service, cell phone owners can remit and donate money, receive and make loan payments, pay salaries, commissions and bills through a text message. It is now estimated that there are more than 70 million individual mobile phone subscribers in the Philippines and more than half of them do not have bank accounts. This is the large untapped market that rural banks are now focusing on in partnership with GXI and, in the near future, with Smart.

Text messaging, which is the cheapest way of electronic communications, is also emerging as the fastest way to avail of banking services. Through the partnership between RBAP and GXI, rural bank clients get access to different mobile phone banking services from anywhere they are, including areas where the security situation is unpredictable, through the use of the mobile phone.

Mobile phone banking services offered via the GCash platform include Text-A-Payment, Text-A-Remittance, Text-A-Deposit, Text-A-Withdrawal, Text-A-BillPay, and Text-A-Sweldo. In addition, rural banks can help small merchants take advantage of mobile commerce opportunities to become more efficient by ordering goods or supplies via mobile money or to sell goods and services to anyone, anywhere.

By providing mobile phone banking services and facilitating mobile commerce, rural banks, at the same time, encourage development in rural areas and provide easy access to banking services to underserved rural communities and small and medium enterprises in far flung areas.

Rural banks are also now major players in assisting with settling GCASH Remit transactions across the countryside with hundreds of thousands of transactions being settled by rural banks in remote areas projected in 2011.

Remittances and money transfers via GCASH Remit along with Text-A-Sweldo salary payments for medium and large companies in rural areas are some of the most frequently used services but others such as Text-A-Payment are becoming more popular among microfinance clients. The service allows borrowers to make microfinance loan payments without having to travel to the bank and without the need to offer traditional pick-up collection methods deployed by some lenders.

To use mobile phone banking services at a rural bank, a bank client only needs to register their mobile phone with the G-CASH service and load their mobile wallet at GCash Cash-in and Cash-out outlets. Many of these shops have now entered partnerships with the rural banks to more actively promote mobile phone banking services. With the new know-your-client regulations issued by the Bangko Sentral ng Pilipinas, opening up a micro-deposit account is easier than ever before. Now, clients wanting to ensure the full potential of mobile money platforms can easily open up an account with any accredited rural bank and start taking advantage of mobile phone banking as well as mobile commerce opportunities.

In addition to the Microenterprise Access to Banking Services (RBAP-MABS) program, which has been supported by USAID/Philippines, RBAP has also received technical assistance from Mercy Corps and MICRA Philippines, which receive support from the Bill and Melinda Gates Foundation, as well as Microfinance Opportunities.

Through these combined efforts, RBAP sees a bright future to harness the significant potential of MMT platforms as well as local partnerships with mobile money cash-in and cash-out outlets to expand greater access to banking services.
Rural banks have now processed more than P9 billion in GCASH related mobile phone banking transactions, and the number and amount of transactions are expected to grow exponentially this year.

With the lightning speed evolution of technology, RBAP sees that mobile phone banking services will become a major channel in the coming years and is well positioned to take advantage of the new and exciting developments. We envision a world where millions without access to banking services can now easily open up a bank account and transact from anywhere at anytime.

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