Filipinos and mobile share a special relationship. With a mobile penetration of over 100 percent, almost everyone in the country has a mobile device.
A recent study found that more than 50 percent of the residents of Manila, the capital of the Philippines, regard their mobile device as the most important piece of technology they own.
Filipinos are also starting to use their mobile phones for more than texting or calling as of late. A recent study found that 35 percent of mobile subscribers in Manila now use their mobile devices to access the Internet while on the go. The increased use of mobile devices for Internet activities is shifting carrier charges from minutes to data.
The Philippines is full of skilled workers. However, due to tough global economic times, these people have looked to offshore jobs in search for greener pastures. Called “Overseas Filipino Workers,” they are now one of the driving forces behind the Philippines’ growing economy.
Last year, OFWs sent back an estimated US$22 billion in remittances to their families at home. This was 5 percent more than the previous year and accounts for more than 8 percent of the country’s GDP. This year, some estimates peg that number to grow by more than 8 percent as the global economy continues to improve and as the country recovers from a string of natural disasters from last year. Remittances are expected to continue to grow in the next couple of years.
The Philippines’ heavy mobile use and strong remittance industry can be a match made in heaven. Mobile remittance can help streamline the remittance process. Senders can send funds wherever they are. They won’t have to drive or commute to a local remittance center, they don’t have to fill out forms, and they don’t have to fall in line to complete the transaction. It’s all seamless and convenient. Likewise, mobile remittance can save recipients the trouble of having to go to a remittance center, fill out a form and fall in line to receive their money. All they’ll need is a simple SMS code that they can use to withdraw funds from a nearby ATM through cardless transactions.
The benefits of mobile remittances also extend to the remittance companies. Mobile can reduce the need for physical branches and personnel to accommodate usual walk-in clients. The reduction in costs of running a remittance operation means these companies can actually lower the costs of sending money for the end-customer. This makes remittances more financially accessible for the masses. While the added customer base also means higher costs for remittance firms, the scalability of mobile would keep that to a minimum since it does not require the additional infrastructure regular brick-and-mortar branches would.
What sets Filipinos apart from others is that they are already familiar with transacting through their mobile devices. The country is among the few that has successfully implemented mobile payment schemes for the masses. Mobile payments (such as GCash) and transferring funds from one phone to another to top-up prepaid SIMs are pretty common in the country.
The familiarity with mobile transactions and the convenience mobile brings to remittances can be the double-whammy that could make the Philippines as one of the global leaders in mobile remittances. And the local companies know it.
From financial institutions to courier services, companies involved with money transfers and remittances in the Philippines are looking into mobile as a hot spot for growth. The race is on for them, and whoever comes up with the best solution will definitely see an advantage over their competition.