Money on the Move

Telecommunication companies offer services that were originally the domain of banks

By Marjorie Rose S. San Pedro

Less than six years ago cell phones were just that, phones. These days the mobile phone has invariably taken to multitasking. Not just content with being a calculator, game console, portable radio, camera, and personal digital assistant, it has recently evolved into a virtual wallet.

The local telecommunications scene has always been fiercely competitive and innovation upon innovation has been introduced to make sure that users stay hooked. And with it, the local telecommunications companies are changing the face of local commerce. It started out with pre-paid accounts, which increased the popularity of cell phones and enabled the masses to use it. Then came electronic reloading that resulted in the popping of e-load centers at almost every street corner. Then came over-the-air reloading (Pasa load and Share-a-load) and then collect calls and the text collect program. In a country labeled the texting capital of the world, the implications of such innovations is no small thing.

Street Smart

In 2000, Smart Telecommunications launched a world's first with SMART Money. Smart Money MasterCard linked a money card to a mobile phone. Affiliated with MasterCard, a user could transfer cash value from her Banco de Oro account to her Smart Money card. There were also over-the-counter reloading options for users without a bank account. In such instances where the reloading was done through accredited partners, a bank receipt was replaced by a text message confirming the details of the transfer.

It acted as a debit card and saved the user from the burden, not to mention the hazards of bringing large amounts of cash. Like a credit card, Smart Money also offered reward points for using the card. It is better than a debit card because it makes checking balances and points possible through your cell phone.

Smart Money paved the way to an online service for remittances by YesPinoy.com. Total Solution Software, the developer of YesPinoy.com, introduced a remittance service where OFWs can send money to the Philippines using their credit card. Money was transferred electronically to recipients' Smart Money account. The transaction was processed within the day with email updates available to give status reports. They charged a 6.5% transaction fee but with most remittance centers charging an average of 10-15% it was still comparatively cheap.

Smart then introduced a Short Messaging Service (SMS) version of cash remittances. OFWs simply go to a partner remittance center which in turn transfers the funds to the recipient in the Philippines through text messaging. There are already existing remittance partners in Hong kong, Athens, London, Madrid, Dublin, Japan, and the United States. And to top it all off, Smart only charges a 1% processing fee.

A recipient receives a text message indicating the Smart Money account number and the amount that was sent. They can then opt to use either a Smart Money card or directly encash it at local Smart Padala Centers. Aside from Smart wireless centers, they can also claim their money through selected McDonald's outlets, SM Department stores, SeaOil gasoline stations, and Tambunting Pawnshops.

Globe Trotting

In the fiercely competitive world of telecommunications, one can be sure that competitors are not far behind. Globe recently launched its own G Cash service. It promises to integrate all the features of the money/mobile card and remittance system without the card.

Existing Globe subscribers don't need to upgrade their SIM (Subscriber Identity Module) cards since they only need to send a text message containing pertinent information including a PIN code to register. Registration is needed only in purchasing or encashing a remittance but one does not need to be registered to receive G Cash. Globe has even given out small denominations of G Cash to its existing subscribers.

With G Cash, users are able to purchase merchandise and pay for services, make person-to-person transactions, domestic money transfer and overseas remittances all through text messages. Users can have their cash converted to electronic money at G Cash centers like Globe hubs, LBC outlets, MTO Tambunting outlets, and 7-11 Stores among others. From there they can use it at participating stores like National Bookstore, Mercury Drug, and Burger King.

Domestic money transfers using G Cash operates pretty much like the share-a-load program. The sender simply sends a text message indicating the amount and the pin code to a number code (2882) plus the recipient's phone number. Those without a Globe subscription can also send by personally going to a G cash affiliate and have them transfer the amount to the recipient's phone. This is also the system for overseas remittances. So far, Globe has partners in Taiwan, Singapore, the United Kingdom, Bahrain, Hong Kong, and Italy. Globe charges a 1% processing fee for both local and international fund transfers.

G Cash users, whether they are regular G Cash users in need of cash or the recipient of a money transfer can also convert their cash at their convenience. It can be done at the same establishments accepting cash-in transactions and at partner banks.

Security Measures

There are, of course, security issues that make a lot of users wary of really getting into the program. Globe's tagline "Wallet na ang cell phone mo" (Your cell phone is now a wallet) gave birth to quips about it being a double loss in cases of cell phone theft. Globe gives assurances that they can block off usage on an account and offers a refund upon the verification of the subscriber's registration information in the case of phone theft. Smart Money on the other hand, stores records in the host system so the loss of the money card or cell phone does not necessarily mean the loss of your money.

The remittance side of these platforms has also caused concern that it might be used for money laundering. However, both telecom companies have a policy that sets a maximum of P10,000 for cash-in or cash-out transactions, in compliance with the Philippines' Anti-Money Laundering Act (AMLA).

Message Received

The system is still at its early stage and there are things that still need to be straightened out. There is additional training and technology that need to be done in the merchant partners' end. There is also a need to increase the numbers of partners for it to be a part of the mainstream.

The telecommunications industry is one of the fastest growing industries in the country today and its contributions have a great impact in changing not just social culture but also local commerce. The latest innovations they have introduced have a great possibility to make an enormous impact on the economy and the lives of the Filipino people living here and abroad.