Digitization seen solving ‘archipelagic’ challenges

By Rizal Raoul S. Reyes @brownindio

AN executive of a financial technology (fintech) company believes hastening the digitization of the local banking and finance sector would democratize access to innovation and bridge gaps in the digital economy.

“The faster the money moves through an economy, the faster the economy can grow. There will always be friction points that can potentially slow the momentum of growth, but the moment we are able to fully digitize the payments process for all Filipinos, we can erase the effect of the natural infrastructure challenges of an archipelagic nation,” Xendit Philippines Inc. President and CEO Yang Yang Zhang was quoted in a statement as saying.

Up until 2021, Statista Research Department noted that cash was still king in the Philippines. But as tech- nology paved the way for new and innovative ways to pay for goods and services, it observed that consumer behavior, likewise, shifted. Digital banking, e-wallets, QR code payments and “buy now pay later” methods have gained significant traction.

With the establishment by the Bangko Sentral ng Pilipinas of a favorable regulatory environment, Zhang said Xendit decided to establish its presence in the Philippines hoping that its technology could introduce robust payments infrastructure. Xendit’s partner businesses enjoy its reliable service delivered through a single integration, with an end-goal of creating a payment experience that is responsive to local needs and promotes inclusive progress, he added.

“Fundamentally, we build infrastructure on multiple layers. We work directly with banks to co-build world-class solutions to address their own challenges and those of everyday consumers,” Zhang said.

“By doing so, we aggregate financial institutions for merchants to create a seamless payment experience that ultimately empowers both customers and businesses.”

Prior to Xendit’s foray as a local player, many of the payment integrations currently available did not exist and had to be built from the ground up. The firm’s portfolio of products and services include one that allows bank-account holders to directly access their funds to make payments on e-commerce sites and top up their e-wallets.

Zhang also noted that support from consumers is an important factor to the success of a digital payment infrastructure. With a strong consumer trust in the system, she said digital acceleration and financial inclusion can be achieved.

Nevertheless, stakeholders in both the government and private sectors must work together to ensure that transactions are safe and secure and that consumers are educated on their rights and responsibilities in the digital economy.

Zhang said they aim to work with not just merchants but with more government and private agencies involved in the transfer of money in the economy. She added the company is currently offering to the local market the capability to scale operations and process millions of transactions efficiently while maintaining uptime all the time.

The BSP’s twin objectives of converting at least 50 percent of total retail transactions volume to digital and onboarding 70 percent of Filipino adults to the financial system is nearing its 2023 set deadline. Now is the time to strengthen the country’s digital payments infrastructure, as its inherent reliability, scalability, and cybersecurity safeguards can help expedite the fulfillment of such vision.