By Victoria “NIKE” De Dios
Image from THEPHILBIZNEWS/MAS
Even before the pandemic, in the Bangko Sentral ng Pilipinas (BSP) report last 2019, it is shown that 77 percent of Filipinos are still “unbanked” while only 15.8 million Filipinos have access to banks. Among the 60 percent of the “unbanked”, the reason for not banking is they don’t have enough money to open a bank account.
While there are other surveys conducted about the unbanked and underbanked Filipinos, the advent of financial technology would pave the way for reducing the numbers of unbanked in the country. Having said this, Simoun Ung, CEO of OmniPay, said in his interview with Oxford Business Group’s (OBG) online broadcasting channel, the key part that cashless payments are expected to play in boosting inclusivity and accessibility in the Philippines is one of several opportunities for the E-Money Operators.
Ung said that the rollout of digital payments would provide opportunities for fintech players to tap into the unbanked sector of society, and bridge divides in the process. He added, however, that some providers would also have to rethink their operating models.
“Part of the response from the central bank and industry is to make micropayments free,” he said. “The challenge then, to fintechs, is […] what will you look like when all the fee-based income disappears? For the ones that aren’t profitable, then it’s going to be even harder to cross that line to break even on an operational basis.”
Turning to the subject of cybersecurity, Ung stressed that there was a responsibility at all levels to become informed about possible threats and the protection available, from the top downwards.
“The central bank will look at the financial institutions that they regulate, and measure and gain a sense of their cybersecurity posture,” he told OBG. “There has to be a greater effort made to ensure that consumers understand the risks associated with the different payment transactions.”
The interview is now available to view in full at https://oxfordbusinessgroup.com/video/simoun-ung-ceo-omnipay.
Marc-André de Blois, OBG’s Director of PR and Video Content, said the interview with Ung had highlighted the shifts taking shape across the Philippines’ financial services sector, as the national drive to make half of all transactions digital by 2023 gains pace.
“While digital payments to merchants in the Philippines have increased steadily in recent years, rising from 523m in 2019 to 654m in H1 2020, the arrival of the Covid-19 pandemic undoubtedly accelerated the move towards cashless transactions,” he said. “I’m delighted that through our video, viewers have been given an opportunity to discover more about how industry players in this important segment are preparing to adjust to these new ways of operating.”