As MobileBeyond’s financial inclusion series has documented, mobile money empowers the unbanked to send and receive money, top off phone minutes, pay bills, finance solar power, gain insurance protection, enable merchant transactions and establish credit.
8,561 miles west of California, across the vast Pacific Ocean, 7107 Philippine islands are the entrance to Indonesia. Only 2,000 islands, though, have inhabitants. A thriving country, ten years ago Globe Telecom, one of the major country’s telcos, created Gcash mobile money services.
In my podcast interview with Paolo Baltao, President of G-Xchange, a subsidiary of Globe Telecom, Paolo and I discuss the launch of GCash, Globe’s mobile commerce arm, in 2006, now one million customers strong. Considering that 80% of the Filopino population is unbanked or underbanked, having a telco enable multiple banking services has lessened the burden of consumers carrying cash. More than that, Filopinos using GCash’ services save time and money attending to small businesses and productive efforts.
Paolo says sharing airtime load was growing before GCash launched (most Filopinos add minutes daily to their phones). Transferring money without a bank account was becoming burdensome, taking two hours or more out of the day for transportation and waiting in line. And BILLIONS of dollars were flowing into the Philippines from far-a-way countries to relatives.
GCash Mobile Money Services: Before and After
You’re living in the fields of the Philippines, growing sugarcane, bananas, palay (rice) and corn. You and your family get paid in pesos once a week. Every few months your cousin, one of ten million Filipinos who works overseas, sends you a cash remittance to make ends meet (10-15% paid to Western Union or other payment processor). You don’t have a checking account; in fact, you’re unbanked. Cash in, cash out, one of 2.5 billion people on Earth who live without financial services. Or…
You have a GCash mobile money services account. When paid, you deposit pesos into an electronic wallet. It’s safe, secure. When your cousin sends a remittance, the money goes directly into your mobile wallet at a lower transfer charge. Filopinos now spend their hard-earned pesos without worrying about the nearest bank branch.
Of course, if GCash members have relationships with banks, they can easily transfer money from accounts directly into their GCash accounts. Paolo says The Central Bank of the Philippines has supported GCash mobile money services since its beginning.
Costs, Locations, Cash In, Cash Out, Compatibility, ATM’s, Employer Payments
Globe Telecom isn’t a non-profit. So what do all these services cost and how does it work?
- To convert cash into GCash costs nothing. Cashing out, however, is 1.8%, not a heavy load when you consider the benefits of having used the company’s services.
- They’re 8000 GCash mobile money services outlets and ATM’s for bank customers near a terminal
- When GCash first started, Paolo says, the SMS number sequence confused some, except the younger, more technical crowd; now with standard USSD on mobile phones, it’s a lot easier, whether paying bills to vendors or sending money to friends and relatives (1% cost)
- 200,000 Filopinos receive wages directly from employers to their GCash accounts
Listen to the podcast as Paolo Baltao discusses these topics and the future of GCash mobile money services in the Philippines.
Notes and Further Reading