The Philippines is home to a large population, many of which are underserved by financial institutions, while also being mostly unbanked. However, digital financial services adoption rate is growing fast as mobile and internet is slowly penetration all corners of the country.
For most of the unbanked and underserved, the digital transformation will be coming close to home as digital is getting a boost from the traditional and most basic retail presence on the ground – through the sari-sari (sundry) stores. This boost is being powered by Smart Padala, a service being offered by one of the Philippines’ most well-known digital financial service PayMaya.
“For financial inclusion efforts to bear fruit, they should be able to reach people at the grassroots, and that means including those in the far-flung areas of the country. Because your favorite Smart Padala by PayMaya center is often also the nearest sari-sari store to your house, we are able to bring digital financial services to Filipinos whenever and wherever they need it,” said Kenneth Palacios, Director and Head of Wallets Business at PayMaya.
Smart Padala by PayMaya are partnered with agents throughout the Philippines, expanding the cashless payment nets to even the farthest and most rural communities of the country. This allows its agents to deliver critical financial services to areas that are not traditionally reached by bank branches and other financial touchpoints, which are usually located in urban cities or municipal centres.
According to the Bangko Sentral ng Pilipinas (BSP) 2015 National Baseline Survey for Financial Inclusion, Filipinos on average, travel 21 minutes and spend PhP43 to get to the nearest financial service access point in their area. Therefore, the financial inclusion potential of services that have penetrated deep into the innermost communities cannot be understated.
The Smart Padala service itself relies on the sari-sari vendors that are common throughout the residential communities of the Philippines. These are usually self-owned businesses that are the cornerstone of every Filipino community. They offer convenient services and products to these residential areas and are usually treated as an integral and trusted part of their communities. This trust is what allows them to be successful digital financial hubs for the area they are servicing.
The Philippines serve as an example of the potential of digital financial services as an alternative to dedicated financial service access points. If people are hesitant to take the time and cost of travelling to these services, might as well these services be brought to the people instead.