With a few established players and emerging challenger brands, the Philippines shows some growth potential in the financial technology (fintech) industry.
“The ingredients of growth are there: huge cash opportunity and huge mobile penetration,” said Adeline Kim, head of Products and Solutions for Southeast Asia, Visa. “The challenge is in changing consumer behavior as well as infrastructure limitations.”
The digital economy in Southeast Asia is estimated to grow by $100 billion this year fueled by the rapidly growing ecommerce industry, according to the 2019 e-Conomy report by Google and Temasek Holdings Pte. and Bain & Co., which was released early this month. The report also forecasts a $300 billion growth in the sector in 2025.
Visa sees partnerships as its answer to the call of financial inclusion of the unbanked sector. Its partnership with Razer Fintech allowed it to reach a large segment through the Visa prepaid card.
“The cash opportunity in Southeast Asia is so huge and we know that the financial institutions are able to only cater to a certain segment of customers,” Kim said. “And Razer, through its plans are able to a wider segment of customers.”
Scale and size are among the factors Visa is looking at in its partnerships.
Just this month, Visa announced its partnership with Revolut Ltd is a UK financial technology company that offers banking services including a prepaid debit card, fee-free currency exchange, commission-free stock trading, cryptocurrency exchange, and peer-to-peer payments.
“Acceptance in new categories and removing friction in new technology like contactless payments is something we are continuing to drive in the Philippines,” Kim said.
Other countries in SEA have produced unicorns in the fintech sector and Kim said once brands from other countries decide to enter the Philippine ecosystem, it signals that the local market is ready.