Capitalizing on the New M-Commerce

Environment
A GCash Case Study
Introduction: Traditional M-Banking

Traditional m-Banking exists as a channel extension strategy

implemented by bank as an addition to:
physical branches
ATM networks
internet or on-line access

z Although interaction with bank is already mobile, still constrained

by physical branch infrastructure often dictating product and
pricing rules
Î Cost and pricing structure still prohibitive to “unbanked” and
underbanked”
z Requires constant physical presence even long after establishment
of account
z Existing service still geared to the “banked” market
z Transactions more on account management and info

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Non-Traditional m-Banking Opportunity
z The Philippines is geographically fragmented; substantial portion
of population in remote rural areas
z 80% of the Philippine population remains unbanked / underbanked
often traveling far to make a simple financial transaction
z Commercial banks still have very limited reach to remote areas
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z There are 42M mobile subscriptions
z Mobile network infrastructure and distribution system are well
developed even in the remotest areas
z The average mobile user is accustomed to loading and sharing
airtime credit over-the-air and is comfortable with mobile phone’s
security features
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z Globe has high transaction processing capability
z Globe has well developed sales force and business development
capability across the Philippines

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Answer to Opportunity : GCash
• Transforming a mobile phone into a
wallet, enabling subscribers access
What is
to a cashless and card-less method
GGash?
of facilitating money transfer with
just a text message

• Enable remote payments

• Pay bank loans w/out going to bank
What GCash
can do and • Pay bills without lining up
Cash cannot? • Pay for food / services from
anywhere
• Send remittances
All you need is a mobile phone and SIM
Instant money transfer via text message costing only P1.00 or U$0.02
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Beyond Mobile Content: GCash Mobile Wallet

Loan Payments to Rural

Banks & Coops

Remote prepaid
Merchant Re-loading
Payments

Money Transfer

Bills Payment

Domestic / International
Remittances

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Central Bank and AMLA Compliant
“…GCash is virtual cash that is better than actual cash, because the system leaves a trail for the Anti-Money Laundering
Council, ,the Bangko Sentral ng Pilipinas, and other regulatory and law enforcement agencies to follow.

Atty. Vicente S. Aquino, Executive Director: Anti-Money Laundering Council Secretariat,

Presentation to APG, Singapore, June 2005

Anti Money Laundering Council

Central Bank
Know-Your-Customer (KYC)
MERCHANTS SUBCRIBERS

Monetary Board
1 time registration and
Resolution no. 116 in
valid ID
Jan. 2005

Duly accomplished
accreditation forms w/ U$ 2,000/month
necessary licenses
CONTROLS

Periodic audits in the

SYSTEM

Reporting of “covered”/
Business Processes and
suspicious transactions
the Systems/Security

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…that has expanded into a Platform
• Half a million active users Worldwide Presence
• Available in over 400 international
outlets in 15 countries
• Accepted in 6,000 domestic outlets
in the Philippines
• 1,500 exchange outlets comprising
of Rural Banks, Pawnshops, Telco
Counters, and FX outlets (all with
government issued remittance
licenses)
GCash transaction value averages
• Spurred a wave of new approaches U$100m per month
and applications in Micro-Finance
and Micro-Payments
ÎProviding micro-finance access
to rural areas is a core strategy

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Business Model: An Ecosystem Approach
Senders Intermediary Secondary
Beneficiaries
Primary
Beneficiaries

Credit to GCash

Via Partner Allowance

Remittance

Payments
Cash In Cash In
Payments

Merchants

Direct
Phone to Phone
Remittance
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Payments: Merchant Centric Ecosystem

Cash In Face to Face

Payments
P2P
WIRE

Remittance Remote Payments

Credit to GCash P2P
P2P Transfers

Remote Deposits
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Road Map to Success
z Focus on the Customer Segment or the right target
market
z M-Banking success is built on top of a habituation
campaign
Î business development around changing
habits
z Evaluate Ease of Use Strategies while complying
with regulations
Î ensure processes and systems initially mimic
current behavior then progress to enhance
offerings
z Critical mass is key but mass adoption does not
happen over-night Customers Banks Traders
z Educate, educate, educate
---------------------------------------------------- Service
Retailers Merchants
z Develop an open platform enabling players to Providers
further enhance and complement existing services
Î Many-to-many syndrome
Î Ubiquitous access is key
z Create new value added offerings on top of their
existing services
z Utilize players’ key area of strengths and expertise
for best & maximum opportunities in the m-
commerce space
z Create an ecosystem

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End of Presentation