RP a fertile ground for innovations in the payment industry

SINGAPORE — The Philippines is proving to be a very fertile ground for developing new technological innovations in the payment industry.

In the past 16 months alone, global payments company MasterCard International has pioneered two industry firsts in close collaboration with its member-institutions in the country.

Shuan Ghaidan, vice president for Advanced Payment Systems for Asia-Pacific of MasterCard International, noted in MasterCard’s media briefing on e-commerce that the Philippines is a "good market to test our products."

He highlighted two new MasterCard-branded products that were developed and pioneered in the country. Smart Money MasterCard Electronic, the world’s first reloadable electronic cash card linked to a mobile phone, was developed in collaboration with Smart Communications Inc. and 1st e-Bank.

The company’s more recent breakthrough, the Mondex smart card Campus application, was developed in collaboration with a local affiliate of MasterCard.

Ghaidan noted that the Philippines is the first market in the Asia-Pacific to carry a Campus application for the Mondex card. The Rogationist College, a co-educational community in Silang, Cavite, is the first school in the region to adopt this smart card application.

In your presentation, you stated that the Philippines is a good market in which to test new MasterCard products? How so?

Ghaidan: Emerging markets like the Philippines are comfortable with brand-name products such as MasterCard and are quite open to new technology. Look at the mobile phone uptake and the SMS usage, they are absolutely enormous in countries like the Philippines. So there’s no problem with technology, no problem with comfort, and there are no issues with brand-name products. The Philippines is really a good market and it’s a big market. If you are looking for a market where credit card is still a little bit of a niche product and you are looking to pile it with more mass market programs – whether they be debit, electronic cash or smart cards – the Philippines is perfect.

How exactly does a global company like MasterCard make inroads in an emerging country like the Philippines with more mass market programs?

Ghaidan: The strategy for countries like the Philippines and for products such as Mondex has always been market clusters, which will eventually be all linked up. Specifically for Mondex, we have already linked up with several malls like Robinson’s (Galleria) and Shangri-La (Plaza) and a couple of schools, and we have some really good projects in the pipeline that we are looking forward to. Using MasterCard’s international brand of products, we can then eventually link them up not only in the Philippines but with the rest of the region and globally eventually as the scheme develops. And that strategy is doing quite well.

You stated in your presentation that the "electronic cash" that many in the industry used to think of as some sort of a Holy Grail a few years ago has not fulfilled its promise. Why was that?

Ghaidan: The problem with the e-cash concept is that it’s limited to one application. The way to go now is smart cards like the Mondex card, which can be customized to carry multiple applications, not just e-cash. For example, a Mondex card can have a loyalty application on one side of the card and that can be a global loyalty program for rewards. Alternatively, on the other side of the card, we can co-brand with a merchant and put in their application on the card. So it’s much more than e-cash – it’s like a loyalty card, a discount card, and a lot of different things as well.

And it can also be a school or campus card like its use in one of the schools in the Philippines?

Ghaidan: That’s right! There’s one school in the Philippines that’s now using Mondex for several school transactions. That’s very exciting indeed! In fact, MasterCard might take that application out of the Philippines and start using it in other markets because there’s a big demand for that campus-style application.

How much more ground do you see this type of smart card gaining in the future?

Ghaidan: After crossing the start-up phase of the project, I can’t see any limit to the potentials of what this Mondex campus card can do.