FinTech innovator Randy Prado to launch mobile money technology in the PH
Mobile Technology veteran from FilAustralia – Randy Prado formerly of Nokia Australia/NZ and Portitech (Portable Internet Technologies) fame is to launch mobile money technology PhonePera in the Philippines. PhonePera, which means “Phone Money” in Tagalog (Filipino Language), is aimed at transforming the lives of millions of Filipinos who do not have access to conventional banking services. PhonePera will predominantly use mobile phones to receive and pay bills as well as send and receive money. PhonePera is aimed at nearly 100 million-plus users of mobile phones in the Philippines, 37% of which have smartphones and/or at the very least has internet access. Republisys Inc, Mr. Prado’s software development company which developed the technology, hopes it will spark a mobile money revolution in the Philippines. INQUIRER.net spoke to Randy Prado, CEO of Republisys and founder of AiPayGo Inc. the Fintech entity that will launch PhonePera.
Why and when did you come back to the Philippines to establish a startup business?
After semi-retiring from Full-Time work in 2007, I’ve been coming back and forth to the Philippines from Australia, starting 2008 to do bespoke software development projects for various small Australian businesses. It wasn’t until 2013 when my Co-founder and business partner in Australia – Samier Dandan thought about setting up a small team of software developers in the Philippines. My wife and I at the time were already contemplating raising our Kids in Manila as we both prefer the Filipino lifestyle, without hesitation, we took our very young family from Australia to go back and work Full-time by establishing our Software Development Company – Republisys here in Ortigas Center, Pasig City.
What are your business intentions for PhonePera?
In the early stages, PhonePera will be designed for people at the bottom of the socio-economic ladder, people who don’t have access to bank accounts or a simple debit card. We will initially focus on that market segment and then as that market segment adopts our application, the rest of the market should slowly begin to adopt it too. I want to see PhonePera be the first mobile payment technology developed in the Philippines expanding globally to the huge Filipino communities and foreign workers deployed around the world in Australia, Europe, North America, and other neighboring Asian countries.
Thanks to the huge Filipino population outside the Philippines, PhonePera can potentially become a global mobile money technology, able to transact in multi-currency and facilitate cross border payments. We’re not quite sure yet, whether we will market the technology under PhonePera or re-brand it in the individual regions as the adoption overseas expands.
It must make you particularly proud given that you’re a Filipino introducing a Filipino developed technology worldwide?
Although PhonePera has a lot of fairly unique features and value propositions as a Mobile Technology. The main idea for PhonePera is to change people’s lives through Technology – that is what would make me very proud. As an example in one of our very first major roll-out, we are changing the payment process for over 50,000 cash beneficiaries in one of the major city in Manila that currently dispense the benefits to underprivileged students by getting them or their guardian to line up once a month in front of the City Hall most often than not in hot searing sun or a rainy day, just to obtain their PHP500 pesos (US$10.00) allowance from the City Government. By providing a simple GPR (General Purpose Reloadable) Card coupled with a Biometric enabled Automated Teller Machine (ATM) inside the City Hall, we would be able to expedite the process a hundred-fold faster, while doing the verification and validation of recipients more effectively.
Did you choose the Philippines because there are a lot of unbanked people? Which other Asian or 3rd World countries do you think you could launch in?
The PhonePera business model will not necessarily succeed everywhere because of local regulations and market situation. Where we can in any given country we can follow the same Socio-economic model we are applying for the Philippines. The feasibility study begins by analyzing the gap between mobile and bank account ownership. 1. How big is that gap? 2. What’s the availability of traditional banking infrastructure in that country?
Countries in Asia like India, Indonesia, Bangladesh are very much within our grasps geographically, so if we were to follow the same Socio-Economic modeling we employed in the Philippines, I think we can expand PhonePera in those countries.
But, having said that, my initial idea of starting PhonePera’s overseas expansion is by simply following the migration path of Filipinos overseas, Filipinos that permanently migrated and left the country for good as well as the millions of contractual workers toiling away to support their loved ones back home. We have a realizable market of over 5Million Filipinos in North America – mainly in the US, over 4Million in the Middle East and a Million more in different parts of Europe.
Thanks to social media and the power of Mobile Apps, we can make that connection to almost every Filipinos around the world. A lot of the unbanked and underserved Filipinos that we are empowering here can be and would-be beneficiaries of the US$25Billion plus remittances being sent by Filipinos overseas. By capturing both the sender and the receiver side puts us in a very good position to dominate the remittance market and expand our market almost on the back of Filipino adoption overseas.
So you are going to use the PhonePera brand around the world after all?
We need to spread the PhonePera brand around the world first because it is important to start with the thinking that Filipinos in various regions when they see the PhonePera logo or download the App, they know they can send money or pay bills from that location. But at some point, in the not so distant lifecycle of PhonePera, we will evaluate the relevance of launching a localized version of PhonePera in those countries, assuming that we’ve already complied with the regulatory requirements to operate in those locations by catering initially for Filipinos using our Technology.
When expanding overseas you will be up against established players like Venmo in the US, Revolut, and Transferwise in Europe, Paytm in India, Nubank in Brazil and so on. How do you expect to compete and differentiate PhonePera?
In addition to those you mentioned, there’s also M-Pesa in Africa who’s expanding in Europe and India, N26 from Berlin now in the US, and not to mention the Philippine giants G-Cash and PayMaya strongly focused here in the local market. PhonePera has the opposite approach to that employed by Paymaya, GCash, and M-Pesa. M-Pesa was borne out of Vodafone in Kenya, G-Cash via Globe and Paymaya is owned or formerly majority-owned by PLDT, these are Apps that emanated from Telco companies. They have a natural distribution network in which they can literally expand their share of the customer wallet by bundling the App with a Mobile subscription. Our Distribution approach is a lot stickier by developing our user base from the ground up. In the use case of the 50,000 plus CCT Beneficiaries of Indigent Filipinos, I mentioned earlier. Although our anticipated average monthly transaction value is only PHP500pesos ($10.00) to start with. We know that the transaction is constant and predictable on a monthly basis. Conversely, In the case of the OFWs (Overseas Filipino Workers), once they’ve accustomed themselves in using our application to send or pay bills on a peer-to-peer basis to billers and their loved ones in the Philippines, it will almost become habitual to use PhonePera whenever the need arises.
In some way you’re cutting out the banks, MTOs and payment providers. Do you think they’re concerned that they’re being made redundant by mobile money wallets such as PhonePera?
A lot of traditional banks in the early days of cross border payments and eWallet were saying that you’re taking away business from us. But we are far from being a direct competitor. Banks and International MTOs cannot compete where we are at the bottom of the Socio-Economic ladder. Our average transaction value will be about US$10.00, to move US$10.00 for a bank from one customer to another is quite expensive. We are basically managing the ecosystem and the customers transact directly with one another. We are not moving thousands of dollars per customer. We have strict limits from the Regulators, because we’re virtual and App-based we can be in almost any place in the Philippines and the World, in Rural areas where the banks have withdrawn from or don’t want to put up a branch because it’s very expensive to have traditional bricks and mortar banking service. We are filling the gap that they’ve left behind and refuse to cater for.
The key success factor for PhonePera is the eventual massive distribution network, where the ordinary person, if he/she receives money or wants to send money, can just walk down the street stores (sari-sari store as they’re called in the Philippines) that offers them this cash- in, cash-out facility.
Where do you see payments technology going in the future?
When people start to get used to using their mobile phones as their wallets, the usage will only grow. More and more people will use it for more and more things. Where will it end up? I don’t know. At my level, when I’m looking at PhonePera, where can we take PhonePera? I think we can take PhonePera in a lot of places. I want to see PhonePera enable people to save as little as 1 centavos a day, even convert their savings into Dollar or Euro and hold multi-currency accounts free of charge, earn interest and use their wallet purchase goods from overseas using their mobile money wallet.
The savings and loan features will become a very big part of the ecosystem for the previously unbanked, as well as for microfinance we can offer micro insurance, micro health insurance and special wallets such as health services. AiPayGo, PhonePera’s parent company is now in discussions with a groundbreaking Philippine Online Healthcare company whereby PhonePera can become part of the Online Healthcare community not just as a payment system but as part of the Health Insurance payment. For instance, when a woman gets pregnant, she can start to save tiny amounts of money into a specific wallet that she can use just for antenatal care or when she goes to the hospital to have her baby. The sky is the limit!
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