Catching the Technology Wave: Mobile Phone Banking and Text-a-Payment in the Philippines

This paper provides an overview of the Rural Bankers Association of the Philippines Microenterprise Access to Banking Services (RBAP-MABS) program in the Philippines. It discusses the developments of mobile commerce in the country.

The paper describes two major mobile commerce service providers:

• Globe telecom;
• SMART communication.

It explains the text-a-payment and mobile banking applications for microfinance, and lists the roles and responsibilities of the following partners:

• Globe telecom;
• RBAP and MABS;
• BSP (Central Bank);
• Rural banks.

The paper elucidates the potential impact of mobile phone banking, stating that it:

• Provides a wide range of services including remittances;
• Improves operational efficiency;
• Increases client loyalty;
• Reduces costs, and enables banks to offer lower interest rates and service charges to the clients;
• Is convenient, easy and fast for the clients.

It highlights the challenges for success of mobile phone banking including:

• Building the ecosystem of retailers, clients and outlets;
• Encouraging public use of mobile phone banking.

The paper concludes by stating that technology can be replicated in other countries provided:

• Existence of large number of cell phone users familiar with text messaging;
• Readiness of rural banks to try something new and innovate;
• Willingness of the Central Bank to support innovation in the banking industry;
• Existence of the ecosystem including merchants, clients and outlets.