Home / Using Mobile Money to provide Payroll Services – an Example of the Better Than Cash Initiative from the Field

Today, USAID announced the launch of their Better Than Cash Alliance. The Better Than Cash Alliance supports the transition from cash to digital payments to achieve the goal of empowering people and growing emerging economies. As mentioned in my earlier blog regarding the Better Than Cash Initiative, I planned to document several case studies where the shift from cash to electronic payments using mobile money has resulted in cost savings and greater outreach.

The article below is excerpt from a case study of the USAID-supported Microenterprise Access to Banking Services (MABS) program’s mobile banking initiative.  The MABS program started to encourage its partner banks to incorporate the use of mobile money to promote greater access to banking services as well as to support greater efficiency in their operations back in late 2004. The MABS program worked closely with mobile money providers such as Globe Telecom’s G-Xchange Inc (GXI) and rural banks to offer a range of banking services that utilized mobile money.

PR Savings Bank was one of the first banks to offer mobile phone banking services utilizing the GCASH platform as part of its products and services portfolio. It now offers a range of mobile phone banking services across its 45 branches nationwide.

Roberto Alingog, Jr., president and chief executive officer of PR Savings Bank, said the bank’s motivation for offering mobile phone banking services was based on three factors: offer an affordable, immediate, convenient, and personalized way to conduct client transactions; help client-merchants find a way to expand market reach and reduce costs; and facilitate development of a more robust local business environment, which would help generate more depositors and borrowers. From the onset, the bank saw mobile phone banking services as an alternative service delivery channel to using checks, cash disbursements and even ATMs.

In May 2008, PR Savings Bank, with support from MABS and GXI, started paying its employees with GCASH mobile money through Text-a-Sweldo (Text-a-Salary). Text-a-Sweldo not only helped the staff better understand and promote the benefits of mobile phone banking services and mobile money in general, but they also realized that the service could jumpstart mobile commerce and mobile payments in the communities served by the bank. PR Bank began promoting the use and disbursement of bank staff salaries via GCASH mobile money and offering payroll services via Text-a-Sweldo to large and mid-sized companies in its service area, thus driving the use of mobile money in communities while keeping the bank at the center of mobile money transactions, much the same way larger banks promote the use of debit cards.

In the Northern community of Sta. Anna, PR Savings Bank’s mobile phone banking services team worked with Globe’s GXI to accredit its clients as cash-in-cash-out mobile money agents and looked for companies interested in mobile money-enabled payroll services. In June 2008, the team identified a leisure resort and casino that started operations inside the Cagayan Special Economic Zone and Freeport as an ideal business to promote Text-a-Salary. During initial meetings with the resort, company officials acknowledged difficulties in managing their payroll. The company had about 800 employees, and every payday, it had to withdraw sufficient funds, prepare employees’ pay envelopes one-by-one, and have a cashier hand the envelopes to employees. The company was desperate for a more cost-efficient method of handling its payroll and was happy to receive an offer from PR Savings Bank to improve operations.

The first few months after the launch of Text-a-Salary were challenging. The bank had to teach the resort employees to register with GCASH and master procedures for cashing in and cashing out. It also identified businesses that could serve as GCASH mobile money agents. Eden Ellin was among the business owners identified. She owns a lodging house, grocery store, prepaid airtime loading station, and lotto outlet. Seeing that she could earn from the service charges, she agreed to become a GCASH mobile money agent. She averages 1,000 transactions a month, earning 30,000 PHP ($714). She says, “I not only get additional income, offering cash-in cash-out, but this also increases foot traffic in my grocery store and loading station, and I am able to offer additional services to my lodging house guests who want to send money outside Sta. Ana while they are on vacation.

By establishing a substantial user base of mobile phone banking customers, identifying and setting up local businesses as mobile money agents, and training bank staff to teach clients, PR Savings Bank has shown how rural banks can leverage mobile money and mobile phone banking services to not only benefit the bank but also entire communities.

Sharing his views on the use of GCASH mobile money to support greater access to banking services, PR Bank President, Roberto Alingog had this to say:

[youtube http://www.youtube.com/watch?v=m2zlZixq32s&w=853&h=480]

To read the full article click on this link.

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