PearlPay wants rural banks onboard its cloud platform

MANILA, Philippines — Financial technology startup PearlPay is set to onboard 200 rural banks nationwide in the digital world via the cloud-based technology, a major boost in the efforts to the Bangko Sentral ng Pilipinas (BSP) to increase the share of cashless transactions in the country.

PearlPay chief executive officer and co-founder Sparky Perreras told The STAR the digitalization of most of the members of the Rural Bankers Association of the Philippines (RBAP) would reach customers with limited or no access to the internet via the cloud.

The cloud-based core banking solution of PearlPay, which uses the Amazon Web Services (AWS), is designed to allow banks to scale up quickly because they can transact and store information as conveniently, as easily, and as quickly as possible.

The core banking system is capable of cash flow analysis, fast product template creation, portfolio management, report generation, user access level, and one system access for all branches.

“If China has UnionPay, India has RuPay, the Philippines should have PearlPay,” he said in an interview.

He said PearlPay would offer cloud-based technologies such as core banking solutions, agent banking solutions and white-label electronic wallet solutions for only $99 as it envisions to create a unified payment network in the country.

Of the 450 rural banks nationwide, he said only six percent have access to electronic system

“They don’t have the necessary capital to acquire the expensive technology that could cost $4 million,” he added.

Perreras said majority of the rural banks spent P1.5 million to P2 million to set up their own data center and another P50,000 per month for licenses.

According to Perreras, rural banks have close to 3,000 branches nationwide mostly located in rural areas, while top lenders led by BDO Unibank of the family of the late retail and banking magnate Henry Sy, Metropolitan Bank and Trust Co. of the family of the late taipan George SK Ty, and Ayala-led Bank of the Philippine Islands only have more than 2,500 branches concentrated in urban areas.

He added the number of depositors of rural banks jumped to 8.7 million from the previous level of 4.5 million depositors.

“Imagine what they can do the moment they are able to gain access to digital banking technology,” he added. About 75 percent of Filipinos do not have the right financial services due to accessibility.

Perreras said PearlPay intends to complete the pilot testing program with Pampanga-based BHF Rural Bank Inc. this year paving the way for the launch with the other 199 rural banks in the first quarter of next year.

The BSP has launched the National Retail Payment System (NRPS) in December 2015 including the PESONet (Philippine EFT System and Operations Network) and the InstaPay to raise the share of cashless transactions to 20 percent by 2020 from only one percent in 2013.

Latest data from the central bank showed digital transactions coursed through PESONet and InstaPay reached P109 billion in end-June. PESONet transactions amounted to P88.1 billion as volume reached 916,793, while InstaPay transactions reached P20.92 billion with 2.47 million transactions.

BSP Governor Benjamin Diokno is optimistic half of total transactions in the Philippines would be cashless in the next five years after meeting the 20 percent target next year with the onboarding of government transactions.