[Executive Edge] Empowering the unbanked

Ezra Ferraz

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[Executive Edge] Empowering the unbanked
VMoney CEO Ralph Santos wants to give the 'unbanked' in the Philippines access to financial services online

MANILA, PHILIPPINES – As an emerging market, the Philippines presents an opportunity to provide financial services to the unbanked, or those who do not have access to traditional banking services like savings and checking accounts.

Some people may wonder why it is beneficial in the first place for the “unbanked” to formally participate in the banking ecosystem by having a savings or checking account. The Philippine economy, after all, often caters to people with little disposable income, as we can see in any grocery or supermarket: just go into one and see how many different kinds of items you can purchase in sachet form.

Having cash on hand may work for small items like toiletries or foodstuffs, but this financial approach is not scalable to larger purchases, like cars or homes. Purchases of this magnitude will undoubtedly improve one’s social mobility and standard of living, but they will typically require the financial instruments that only a bank can provide, such as credit.

One of the most promising financial-tech companies targeting the “unbanked” and the growing middle class in the country is VMoney. Led by CEO and founder Ralph Santos, the firm has experienced rapid growth since I caught up with him in June (READ: [Executive Edge] The company protecting you from Internet scammers).

VMoney provides a suite of fin-tech services that companies can avail of, including white-labeled debit cards, point-of-sale systems, e-commerce platforms, payroll disbursement, and more. The company now provides fin-tech solutions to such companies and institutions as Agoda, Cold Stone Creamery, cd-r king, Gold’s Gym, Mango, Mossimo, Team Manila, Vans, and the Department of Tourism.

Citystate Savings Bank partners with VMoney

BANKING THE UNBANKED. VMoney CEO Ralph Santos wants to give the “unbanked” in the Philippines access to financial services online

The fin-tech firm also closed a deal last week with Citystate Savings Bank. Of the new partnership, Ralph said, “VMoney will provide a robust financial platform to Citystate Savings Bank that will enable their existing products and services for online accessibility. In turn, this will improve customer experience and tap into net revenues.”

For those not familiar with VMoney, the company provides an online financial portal to all its users, roughly comparable to the kind that PayPal offers. Through VMoney’s portal, which Citystate Savings Bank users now have full access to, people can avail of a wide variety of financial services.

Customers can pay for their bills, send remittances, transfer money, buy pre-paid products, and deposit money into their bank account.

If they do not have a savings or checking account, VMoney makes it easier for them to get one, which Ralph summarized in a short but telling sentence: “The average Filipino will be able to apply for a bank account for the first time online.”

What’s good for unbanked Filipino consumers is also good for Citystate Savings Bank. By providing consumers with access to banking services via VMoney, Citystate Savings Bank will have a competitive advantage against the larger national banks – the BDOs and BPIs of the country – all of whom have robust online financial portals.

“The VMoney platform will immediately allow Citystate Savings Bank to compete technically with the biggest banks in the country,” Santos said, adding that VMoney chose them precisely for that reason – growth.

“Citystate Savings Bank is investing in its growth and is aggressively approaching the market to carve its position,” Santos said. “We are therefore excited to provide them with the technology necessary to differentiate itself in a market that is becoming more savvy and starting to demand better services.”

While the deal between VMoney and Citystate Savings Bank is not exclusive – VMoney can offer its portal to other companies, banks included – the deal postures the bank very well for the future. The bank has more than 25 branches across the Philippines, from Taguig to Antipolo, Batangas, and Cebu, and customers at all these locations can now use VMoney.

Serving the unbanked

As beneficial as the new partnership is for both Citystate Savings Bank and VMoney, which now gets thousands of new users, Ralph never loses sight of who this deal can help the most – the unbanked.

“Although we see this as a tremendous opportunity for both VMoney and Citystate Bank, this arrangement holds us true to our mandate and focus to empower the underserved and underbanked but with quicker and greater reach,” Ralph said.

Ralph elaborated on why it’s important for the unbanked to become banked, and the issue to him was time. “The constant struggles and challenges of the emerging market is not only the cost of services but also lost time,” he said. “The unbanked spends countless hours traveling and lining up to pay bills, send remittances, and shop in brick-and-mortar stores.” 

In a very real sense, Ralph wants to improve the unbanked’s standard of living by giving them one of the simplest luxuries of all – more time. He sees VMoney as contributing to this goal. “VMoney provides the access and convenience to complete all 3 under one portal to allow everyone to focus on the more important things in life,” Ralph said.  – Rappler.com




Rappler business columnist Ezra Ferraz graduated from UC Berkeley and the University of Southern California, where he taught writing for 3 years. He now consults full-time for educational companies in the United States. He brings you Philippine business leaders, their insights, and their secrets via Executive Edge. Follow him on Twitter: @EzraFerraz

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