Cryptocurrency and Philippine retail

Cryptocurrency requires consumers to make a whole host of changes — Filipinos effectively must learn how to purchase, safeguard, spend, and remit in an entirely different way.

EVEN in the Philippines, news coverage of cryptocurrencies like Bitcoin and Ethereum sways toward particular narratives. Local writers have hailed these technologies as revolutionary, transformative, and game-changing, particularly in how some of them may change the way overseas Filipino workers (OFWs) send remittances. Cryptocurrency may very well be all those things, but for them to reach its full potential in helping Filipino workers and businesses, we must first realize that digital currencies will follow the same technology adoption life cycle that other innovations have had.

While business media and cryptocurrency enthusiasts often like to think of the technology as unlike anything that has come before, its growth trajectory closely follows many other inventions over the last thousand years, including everything from the printing press and the light bulb to the radio and the internet. All of these are disruptive innovations. Like cryptocurrency, these innovations require a change in behavior in order to make use of them: After Gutenberg’s invention of the printing press, readers had to acclimate to the look of moveable type over handwritten copy. In much the same way, cryptocurrency requires consumers to make a whole host of changes — Filipinos effectively must learn how to purchase, safeguard, spend, and remit in an entirely different way.

Successfully getting people to make the changes needed to adopt a disruptive technology occurs in stages, as Geoffrey A. Moore revisited in his seminal 1991 book Crossing the Chasm. Most famously, you have your innovators and your early adopters - two groups who readily buy into new technology, the first out of pure enthusiasm for cuttingedge tech, the second out a keen understanding of its potential strategic value. In the Philippines, these two groups are readily identifiable: They’re the first

wave of Bitcoin companies and the customers who support them.

Next you have the different segments of the mainstream: the early majority, the late majority, and then finally your laggards. The most critical jump between all of these stages is the one between early adopters and the early majority, whom Moore also terms as “pragmatists” for their practical approach to technology.

“If they are installing a new product, they want to know how other people have fared with it. The word risk is a negative word in their vocabulary—it does not connote opportunity or excitement but rather the chance to waste money and time. They will undertake risks when required, but they first will put in place safety nets and manage the risks very closely,” explains Moore.

The distinction between early adopters and the early majority is important to define for it is the chasm that cryptocurrency now faces in the Philippines: How can we expand adoption of this technology to the bulk of Filipinos who will view it much more pragmatically? There is a disassociation, in other words, between how we have marketed cryptocurrency to early adopters with how we should market it to the early majority, given their different needs.

This question is one that the entire industry must address, but it’s one that Moore himself already has the groundwork for. Crossing the Chasm, after all, is not just descriptive, it is prescriptive: It gives advice on how to market high-tech products like cryptocurrency to the early majority. Invoking a D-Day analogy, Moore argues we must target the point of attack (i.e. target a specific market niche), assemble an invasion force (i.e. create the whole product), define the battle (i.e. develop your communications), and launch the invasion (i.e. determine distribution and pricing).

In Moore’s framework, I believe that the Philippines is at stage one: We need to determine a specific market niche that will be a vanguard for mass adoption. In my mind, there is only one rational choice for this task: malls. In other words, consumer brick-and-mortar retail. This idea is not as far-fetched as it may seem. In Hong Kong, for example, several popular eateries can now accept cryptocurrencies as payment. This was achieved through a partnership between the FAMA Group (Locofama, Sohofama, SUPAFOOD, and the Hive Cafe) and Indonesian-based Pundi X, which installed the Pundi X POS into the former’s restaurants. Through Pundi X POS, FAMA Group restaurant goers can order food or drinks with Bitcoin, Ethereum, NPXS, and other cryptocurrencies via the Pundi X Pass card, a mobile wallet, or fiat money.

Pundi X is leading the cryptocurrency economy into the future with its launch in Hong Kong and its deployment across Asia over the rest of the year: The average consumer, who in all likelihood may have never thought about transacting with cryptocurrency before, now has a convenient avenue to do so. You can then view each deployment as a kind of hot spot, from which a wave of cryptocurrency adoption will emanate outward. The cryptocurrency community in the Philippines needs to think in much the same way, evolving from our abstractions of the future to the business reality of today and its familiar call to think strategically in terms of placement: location, location, location.