Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, reportedly has indicated that the number of mobile banking transactions in the country has reached an aggregate of 150 million, totaling PHP 440 billion (USD 10.4 billion) through December 2010. The Philippines was recently recognized by the GSM (Global System for Mobile Communications) Association, an association of 800 mobile operators and approximately 200 related companies, as “among the most advanced mobile money markets in the world.” Mobile banking is defined as “performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone.”
GSMA cited three contributing factors for the success of mobile banking in the Philippines: 1) the high SMS (short-message service, also known as text messaging) literacy rate of Filipino mobile users; 2) the involvement of BSP in supporting mobile banking, such as through BSP Circular 649, which established a regulatory framework for e-money and e-money issuers; and 3) actions taken by two of the country’s telecommunications companies – Smart Communications (SMART) and Globe Telecom.
In 2001, SMART partnered with Banco de Oroa, a Filipino commercial bank, to launch “SMART Money,” a service that enables users to transfer money both domestically and internationally via mobile and to pay for goods using a card. In 2004, Globe Telecom launched an SMS-based mobile wallet service called “GCASH” that offers functions similar to that of SMART Money via mobile phones. In 2010, Globe Telecom launched an automatic teller machine card linked to a mobile wallet, called “GCASH Card,” which gives its subscribers access to GCASH day and night.
By Carol Kim, Research Associate
About the Bangko Sentral ng Pilipinas (BSP): BSP is the central bank of the Republic of the Philippines. Established in July 1993 under the provisions of the 1987 Philippine Constitution and the New Central Bank Act of 1993, BSP took over from the Central Bank of Philippines as the country’s central monetary authority. Headquartered in Manila, BSP has three regional offices performing cash operations and eighteen branch offices. BSP participates in advocacy programs concerning microfinance, financial education and consumer protection.
About Smart Communications (SMART): Smart Communications Incorporated (SMART) is a wireless service provider in the Philippines that was founded in 1991. SMART provides postpaid and prepaid plans; broadband Internet services; and Smart Money, a debit card linked mobile phone service for users to pay bills, purchase goods, and transfer funds. SMART operates as a subsidiary of Philippine Long Distance Telephone Company. As of June 30, 2010, the Philippine Long Distance Telephone Company reports total assets of PHP 264 billion (the equivalent of USD 5.98 billion).
Sources and Additional Resources:
Malaya Business Insight: “More Filipinos turning to mobile banking”, August 2011, http://www.malaya.com.ph/aug01/busi5.html
MicroCapital.org: “MICROCAPITAL BRIEF: Bangko Sentral ng Pilipinas Reduces Fees, Loosens Branch Restrictions to Promote Financial Inclusion in the Philippines”, July 10, 2011, https://www.microcapital.org/microcapital-brief-bangko-sentral-ng-pilipinas-reduces-fees-loosens-branch-restrictions-to-promote-financial-inclusion-in-the-philippines/
MicroCapital.org: “MICROCAPITAL BRIEF: Smart Communications, Microfinance Council of the Philippines to Extend Mobile Banking Services Through “Smart Money” Platform”, May 30, 2011, https://www.microcapital.org/microcapital-brief-smart-communications-microfinance-council-of-the-philippines-to-extend-mobile-banking-services-through-“smart-money”-platform/
MicroCapital.org: “MICROCAPITAL BRIEF: Microenterprise Access to Banking Services and Rural Bankers Association of the Philippines (MABS-RBAP), G-Xchange Inc. (GXI) Launch FaceCard, an Automated Teller Machine (ATM) Card for Microfinance Banking Clients”, November 4, 2010, https://www.microcapital.org/microcapital-brief-microenterprise-access-to-banking-services-and-rural-bankers-association-of-the-philippines-mabs-rbap-g-xchange-inc-gxi-launch-facecard-an-automated-teller-machine-atm-car/
MicroCapital’s Universe Profile: Bangko Sentral ng Pilipinas (BSP), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bangko+Sentral+ng+Pilipinas+%28BSP%29
MicroCapital’s Universe Profile: Smart Communications (SMART), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Smart+Communications%2C+Inc.+%28SMART%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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