China-Philippine technology cooperation boosts digital transformation
Manila
Cooperation in digital technology between China and the Philippines has further deepened their bilateral ties and accelerated digital transformation in the Southeast-Asian nation, industry gurus told the China-Philippines Business Forum in Manila on Monday.
At the forum’s second panel discussion themed “How Business Can Transform in the Digital Era”, Anthony Thomas, president and chief executive officer of Philippine mobile payment operator Mynt, and Jubert Daniel Alberto, country head of operations at Italpinas Development Corp Philippines, shared their insights on the challenges and prospects in the digital transformation and innovation trend.
Partially owned by Ant Financial Services Group — the financial arm of Chinese e-commerce titan Alibaba Group, and formerly known as Alipay — Mynt started off with its mobile phone top-up service and has expanded to cover remittance and loan services, business solutions and platforms.
“We look at digital transformation as something that really solves the problem,” Thomas said, describing Mynt’s partnership with Alipay as a strategic move that has brought value to both sides.
“Alipay has brought more elements to the platform and also the capital. As we may know, the payment service is a very low margin business. If you really want to make it to the millions among the public, you have to make it more affordable first,” he said.
“Beyond that, Alipay, as a leading global digital platform providing financial services, also provides expertise in customer experience and risk management to Mynt, which allows the investment we’re making to go further,” Thomas said.
Chinese travelers — the second-largest group of foreign tourists in the Philippines — enjoy more convenience through the partnership between Mynt and Alipay. It helps cross-border payments by tourists through Mynt’s payment platform Gcash. “Tourists just need to scan a common Gcash or Alipay QR code to pay from their Alipay wallet,” Thomas explained.
“We also launched a remittance flow between AlipayHK and Gcash, adopting blockchain technology,” he added.
Besides Alibaba Group, Chinese tech behemoth Tencent teamed up with Philippine technology enterprise Voyager Innovations in an investment worth $175 million last month.
Thomas said he was excited to see several fintech giants tapping into the Philippines. “More capital coming in will help the business grow,” he said.
According to Thomas, two out of three Filipinos don’t have access to bank accounts as the country is spread across more than 7,000 islands, and a third of the districts don’t have physical bank branches. “So the other side of it is that mobile devices are ubiquitous — everyone has a mobile phone.”
Under such circumstances, Mynt plans to introduce various digital financial services to the public not just for convenience, but also variety.
“When we define our own business, we work with lots of other businesses which are also looking at transformation. And, we embed digital transformation into their businesses which, ultimately, will benefit customers and ourselves,” Thomas said.
Addressing concerns arising from digital payment platforms, Thomas said the transparency and constant flow of data recorded actually could enhance security. Besides, part of Alipay’s investment is used to strengthen such security.
“We have the expertise from China. Moreover, regarding fraud losses from payments through Alipay, more data flowing into the digital world can be captured, leading to better detection and monitoring of potential fraud,” he said.
Traditional brick-and-mortar banks in the Philippines have also partnered with digital financial services providers, such as Mynt’s Gcash. “We’re not competing with the banks, but cooperating with them, providing them access to the platform,” Thomas said.
However, both Thomas and Alberto admitted it will still take some time for Filipinos to fully embrace the era of digital transformation.
According to Alberto, less than 3 percent of the Philippine GDP came from digital products and services last year. “It’s already there with little digital products and services, but not that much,” he said.
However, starting this year, three out of five organizations in the Philippines are considering embracing digital transformation.
“We’re saying that, by 2021, the immense use of all technology, business objects of organizations will contribute heavily to the country’s GDP — to about 40 percent,” Alberto said.
He saw a promising future for the two countries by cooperating in digital services and technology.
“The technologies coming from China could give the Philippines more options and alternatives,” he said. “And, it’s obvious that the technologies benefit us and help local SMEs and other enterprises in the long run.”