Guaranteed credit

In theory, MMO Card Corp. shouldn’t have lasted a year, much less 26 years. Most of its cardholders do not meet the minimum income requirement of bigger credit card companies. Nor is the company backed by a financial institution.

And yet, MMO currently has a cardholder base of 51,000 with a lower default rate than many bank-backed card companies. Its card is also accepted in 350 boutiques and shops in and around Metro Manila, including the upscale Rustan’s Department Store chain.

MMO, which are the initials of its founder, Marlyn Ortiz, started out and remains in the guarantor business. "I was a working student taking up chemical engineering at Adamson University and helping out my aunt, a well-known guarantor in Makati’s central business district. Back then, access to credit cards was limited. One of the ways shopping boutiques sold their merchandise was by accrediting guarantors who served as the installment sale intermediaries," said Ortiz.

Under this set up, the cardholder buys merchandise from certain stores and repays the purchase in four equal payments at no interest. The guarantor earns from the commission it gets from the stores that accept the card.

Riding on her aunt’s network, Ortiz went on her own. She started with five popular shoe stores, issuing cardholders laminated paper cards as proof of membership and using control booklets to keep track of the different transactions made by the cardholders.

"I acted as the guarantor, collector and accountant all in one. I painstakingly checked and balanced the accounts of my growing number of members on my control booklets. I recorded each statement of account by hand," she said.

Turning point

That began to change in 1997 when the company decided to switch to plastic credit cards with magnetic stripes that could keep better track of the transactions.

"While other businesses were worrying about the Y2K bug, we began overhauling our entire billing, collection and accounting systems through computerization. From then on, the expansion of the company was simply unimaginable," said Ortiz.

Switching to a paperless system was not without its problems. "Some people questioned the viability of our systems, which was understandable because people tend to forget that I hold a degree in chemical engineering , a profession that entails an analytical and inventive aptitude," said Ortiz, who designed the systems with certified programmers.

MMO’s swiping technology was entirely funded from within.

It was at this point that MMO linked up with Planters Development Bank for a credit line, additional capital for the improvement of its operations, and, more recently, giving MMO cardholders access to cash advances facilities in its bank branches in Metro Manila.

Cardholders can also now load their prepaid cellphone cards anywhere by dialing a hotline.

Despite offering services that are now standard with the card industry, MMO remains true to its origins. "We are not on the same track as other credit card companies," said Ortiz. "We want to concentrate on the market we know best, the rank-and-file employee and the blue collar worker."

For Ortiz, the best proof that MMO is very much in business are the number of cardholders who not only spend but also recruit other cardholders. They get a certain percent of the processing fee and, like Ortiz, are entrepreneurs in their own right.