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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.


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