MANILA, Philippines — The payment card industry is swiftly ever-changing that certain innovations would trickle down to the remittance market was inevitable.
With Overseas Filipino Workers (OFWs) comprising an estimated tenth of the Philippine population and sending a record $18.8 billion in remittances last year, the Philippines has grown into one of the world’s most sophisticated remittance markets.
In the last year alone, the Philippines became the world’s fourth largest after India, China and Mexico. And while the Central Bank of the Philippines expects remittance growth to slow down this year at 5 to 6 percent, the time is still ripe for introducing innovations.
According to Vikram Modi, head of Digital Money Transfer and Personal Payments for Visa’s international markets, there is a trend to move from cash-based remittances to electronic channels—among the enabling trends being 65 percent of Filipino remittances in the United Arab Emirates are made by those below 34 years old and are tech savvy, educated, and looking for new and modern channels to do their remittances. “What these things add up to is that there is a need for quick, modern electronic payment services, but still with the control associated with bank-issued and bank-centric services,” Modi shares.
This is the context within which Visa has come up with its latest personal payment platform: online electronic remittances that enable Filipinos to receive money directly onto their Visa Debit Cards in a matter of minutes. “Essentially it offers banks and partners a multi-channel and multi-lateral global network in which to exchange funds between individuals,” explains Modi.
Fast, Secure, Convenient
Last June 8, Visa launched Asia’s first electronic remittance service in partnership with the Union Bank of the Philippines (UnionBank). “Adding a remittance feature to Visa cards makes a lot of sense as there has been a growing demand locally for more advanced remittance channels,” shares Iain Jamieson, Visa country manager of the Philippines and Guam, adding that there has been an ever increasing preference for the electronic migration of these remittances over cash-based options.
The introduction of this new payment platform has significant implications. “In the future, people are going to be able to send money almost instantly from person to person,” Jamieson shares. “I’m going to be able to be able to walk into a sari-sari store and if that person has a Visa card, I’m gonna be able to pay for the goods by sending money from my Visa card to his.”
It’s best to look at what a Visa card has traditionally been. “Visa has always been used to make payments—you swipe your card, you pull funds out of the Visa card, and you make your payment in real time,” explains Modi. What Visa is doing now is adding the other half of what the card can do, “which is essentially to receive payments this time. This platform is the mirror image of the traditional Visa card. It’s basically finding the final piece of the puzzle.”
How it Works
Currently, the service is limited to OFWs in the United Arab Emirates where Visa has partnered with UAE Exchange, a 90 branch-strong company engaged in the remittance efforts and exchange business.
Filipinos working in the UAE need only visit any UAE Exchange, where they provide the recipient’s Visa card number to initiate the funds transfer. The service does away with the need for senders filling out complicated forms and provide routing information like bank codes and branch addresses. Funds are credited directly to the recipient’s Visa Debit or Prepaid card in minutes.
“This new near real time visa remittance service actually negates the need to visit an agent location to collect the funds or wait for a courier to deliver funds,” points out Justo Ortiz, chairman and CEO of UnionBank. “It opens up the opportunity for users to use the card instantly in over a hundred thousand shopping locations and 5,000 ATMs. Part of the commitment any bank makes to its customers is security, privacy and trust; but we at Union Bank realized that this isn’t enough—you need to innovate and live up to a higher purpose of enabling communities through smart banking solutions.”