Paper

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

Accessing financial services through text messaging
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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.