Smart Money products give it edge over rival GCash – BMI

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THE product offerings of Smart Communications Inc. subsidiary Smart Money give it an edge over rival operator GCash, Globe Telecom’s wholly owned subsidiary, said BMI Research, think tank unit of the Fitch Group.

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“BMI believes that the product offering of Smart Money will be strengthened through such partnerships and give Smart an edge over rival operator Globe’s GCash service,” BMI said.

“Smart has introduced various innovative services around Smart Money–such as enabling subscribers to pay for their flights through a tie up with Philippines Airlines,” it noted.

Earlier this month, Philippine Long Distance Telephone Co. (PLDT), parent of Smart Communications, partnered with Uber to allow passengers to pay for rides using their Smart e-Money mobile wallets.

“Smart will be able to support national financial inclusion goals by broadening the range of services offered through its Smart Money MFS [Mobile Financial Services] platform,” BMI said.

It explained, “The Philippines’ archipelagic nature inhibits infrastructure expansion required to improve banking penetration and results in bank branches and automated teller machines (ATMs) being more skewed towards metropolitan areas.”

“The central bank, Bangko Sentral ng Pilipinas (BSP) notes that at the end of 2014, 36 percent of 1,634 municipalities did not have a banking office. Furthermore, the average amount of time needed to reach the nearest bank and ATM is 26 minutes and 22 minutes respectively, costing P52 and P47 for a two-way trip.

“In addition to removing cost and geographical barriers that impede on financial penetration in the country, the operator’s large mobile network also facilitates government-to-person (G2P) payments,” it said.

Smart has partnered with BDO Unibank to launch a Smart Pay-With-Mobile service for Apple content. The new service allows postpaid subscribers to access App Store, iTunes and Apple Music items without a credit card, charging the purchases to their mobile account instead.

Smart’s postpaid subscribers can send an SMS to activate the Smart Pay-With-Mobile service and will receive a unique Virtual Credit Card number which can be used exclusively with their iTunes accounts.

According to the World Bank’s Global Findex, credit card penetration in the Philippines was just 3.20 percent in 2014. This new service will thus encourage data usage by opening up a wealth of digital content to consumers without credit cards.

Smart’s Pay-With-Mobile service illustrates how operators are considering new ways of expanding their mobile financial services (MFS) offerings to include more premium services, and at the same time, encourage on-net data usage by making digital content more accessible.

Smart recorded a 169 percent year-on-year increase in mobile data usage in the first half of 2015, and has allocated P43 billion for capital expenditures this year to expand its infrastructure in order to cater to rising demand.

This has enabled BMI to forecast that 3G/4G subscribers will grow by 33.6 percent, from 18.27 million in 2014 to 24.41 million by 2019.

PLDT notes that in 2014, P5.2 billion worth of cash grants were disbursed to more than 1.5 million household beneficiaries through its MFS platform.

Moreover, growing its digital financial services portfolio will complement the operator’s push into e-commerce. PLDT reports that over 30 percent, or 20.66 million, of its 68.86 million subscribers were smartphone users in the second quarter of 2015.

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