CHAPTER 5. Applying Technology: Mobile Phone Banking

The Philippines is regarded globally as the text messaging capital of the world. More than 86 percent of the population has access to a mobile phone.[15] Recognizing the potential to transform access to financial services through innovative technology, MABS pioneered the use of mobile technology to deliver microfinance services. MABS served as a bridge between rural banks, mobile network operators Globe Telecom and SMART Communications, Inc. and assisted with regulatory approvals from the Bangko Sentral ng Pilipinas.

MABS assisted rural banks in providing mobile phone banking and mobile commerce transactions by developing new products and services. MABS worked with RBAP to help obtain approval from BSP for mobile money-enabled banking services and to develop appropriate operations and procedure manuals for rural banks.[16]

Strategy for Expansion

During Phase 4, MABS initiated a multi-pronged approach to extend a full variety of mobile phone banking applications and services and expand the outreach to more rural bank clients, including:

  • Working with Globe‘s GXI and Smart Money to offer accreditation training courses to interested rural banks
  • Developing a Mobile Phone Banking Marketers’ Program with Globe’s GXI
  • Implementing the Channel Management Project with the Gates Foundation, through Mercy Corps
  • Promoting financial education to Support the Adoption of Branchless Banking Project with Microfinance Opportunities under a grant from the MasterCard Foundation
  • Supporting the use of mobile money-enabled debit cards
  • Improving access to government conditional cash transfers via mobile money and rural banks

Through these activities, MABS helped expand a network of banks that provided cash-in and cash-out services; offered mobile phone banking services; and promoted, trained, and educated new and existing clients.

Mobile Phone Banking Marketer’s Program

In coordination with GXI, MABS launched the Marketers Program, an incentive-based initiative to assist rural banks in using their own client base to act as marketers to better promote mobile phone banking services in the community. This increased usage and transaction volume by raising awareness of mobile phone banking services and assisting in better developing rural banks’ mobile payment ecosystems. Marketing agents helped clients to open accounts and learn about mobile phone banking services at accredited rural banks that made use of the GCASH platform to facilitate deposits, withdrawals, loans, loan and bill payments, remittances, salary disbursements, and mobile commerce opportunities for small merchants. The program targeted merchant-clients of rural banks, which also helped these businesses by providing cash-in and cash-out services, as well as increasing foot traffic.

Channel Management Project

The Channel Management Project built on the Marketers Program by assisting accredited rural banks in supporting and managing the network of merchant-partners to better market and service cash-in/cash-out needs of rural bank clients who used mobile phone banking services. It helped to further strengthen the rural agent network of mobile money-enabled agents in partnership with GXI and to expand the rural banks’ ability to cross-sell other bank products and services. Dedicated channel managers were trained and hired at select participating banks to implement merchant-partner channel management activities. The lessons learned were shared with other rural bankers through national roundtable forums and other events.

Clients are using mobile phone banking to meet a full range of their financial needs. The picture above shows a student preparing to cash-in before making a deposit via mobile money at a GM Bank kiosk in the town of Laur in Central Luzon in March 2009.

Financial Education for Branchless Banking Initiative

In May 2010, MABS assisted RBRDFI in obtaining a $100,000 sub-grant from Microfinance Opportunities under its grant from the MasterCard Foundation to support the uptake and effective use of branchless banking services through financial education. The partnership aimed to develop a robust financial education initiative to support a more rapid adoption and expansion of mobile phone banking in rural areas serviced by rural banks.

After initial market research, prototype testing, and revision based on results of the prototype testing, a financial education toolkit was completed in November 2011. The toolkit and materials include guides, posters, standees, brochures, and frequently asked questions that focused on assisting rural banks in better addressing issues faced by clients on use and adoption of mobile phone banking services. The toolkit also helps banks highlight the positioning of mobile phone banking services as a way to save time and money. Financial education messages, like the value of saving regularly and how to make a savings goal and plan, are also embedded in the tools.

Mobile Money-Enabled Debit Cards

In parallel with helping participating rural banks expand the use of and acceptance of mobile money, MABS worked with GXI to offer new mobile money-enabled debit cards. These debit/ATM cards were specialized cards that included a logo of the rural bank and were linked to the mobile money account of the clients. The idea of supporting a new mobile money-enabled debit/ATM card was to provide clients with more options to withdraw funds from an ATM when there are no agents nearby.

By 2011, the initial mobile money-enabled debit/ATM card launched in a partnership between MABS and GXI was rebranded by GXI to focus on employees who received their salaries via the Text-a-Salary service. New features offered included two free withdrawals a month from an ATM, low-cost life and accidental death insurance, burial assistance insurance, ATM theft insurance, and fire insurance.

In 2012, the Bangko Sentral ng Pilipinas authorized rural banks to assist with registration and release of instant Smart Money cards, which is expected to dramatically increase the access of Smart Money services among rural banks and their clients.

Government Conditional Cash Transfers

Through participating banks offering mobile phone banking services, MABS supported implementation of the Pantawid Pamilyang Pilipino Program — a government conditional cash transfer program implemented by the Department of Social Welfare and Development for poverty alleviation and social development. The program extends direct cash grants to poor households in rural areas. Mobile phone banking partner rural banks that are also GCASH accredited banks act as disbursement points for the program, using Globe’s GCASH remit service to facilitate remote cash-out payments.

Other Activities to Promote Mobile Phone Banking

Text Reminder System

Building on the success of the mobile phone banking services initiative, MABS expanded the services to include semi-automated mobile banking alerts for rural bank clients. MABS worked with private sector partner MyClick Technologies to develop a text reminder system, which automated sending loan payment reminders to borrowers. The system allows banks to input collection dates and amounts on a simple software program that automatically sends messages using a simple modem attached to a computer. Banks have used this program to send loan amortization payment reminders, contractual savings reminders, and marketing messages via SMS/text messages to their clients.

Partnership with Nokia

To better support mobile phone banking services, MABS also assisted RBAP in developing a strategic partnership with Nokia Philippines. Under this partnership, Nokia Philippines agreed to sponsor printing of a wallet guide for the MABS-developed mobile phone banking services. This guide describes features of the mobile phone banking services and gives users step-by-step instructions for completing transactions. Under the partnership, several rural banks also agreed to offer microloan services to clients who were interested in purchasing a Nokia phone. Known as the Own-a-Nokia Phone Loan Program, this initiative assisted rural bank clients who did not have a phone and needed financing to acquire one.

Opening a Window to the World

With the growing number of international study groups that visited the Philippines to study the  rural banks’ experience with offering mobile phone banking services, MABS worked with RBRDFI to set up the International Visitor’s Study Group Program. As host of these study groups, RBRDFI helped highlight the policy and regulatory environment around mobile money issuers and shared the country’s experience using mobile money to enable banking transactions and key lessons learned in implementing mobile phone banking services for rural clients.[17] Sharing key lessons and pioneering experience in mobile phone banking was not only limited to visiting study groups. MABS’ staff and representatives of participant banks were also invited to speak at international events to share their experience in offering mobile phone banking services.[18]


As of the end of June 2012, 77 rural banks with 1,171 branches and banking offices were accredited to offer mobile phone banking services using GCASH and Smart Money. Registered mobile phone banking clients exceeded 390,000. More than 3 million mobile phone banking transactions valued at more than 17 billion PHP ($400 million) have been facilitated by accredited rural banks. (See exhibits below for historical information.)[19]

Exhibit 7: Mobile-Phone Accredited Banks

Exhibit 8: Mobile Phone Transactions
– Data for 2012 is projected based on the actual growth rate of MPB transaction for the first half of 2012.

[15] According to the GSMA Mobile Money Deployment Tracker, mobile phone penetration in the Philippines is at 86.5 percent.

[16] You may view a video on MABS’ mobile banking services in the attached DVD (“Distant Access”) or online at:

[17] See Annex E for a list of international study tours.

[18] See Annex F for a list of international conferences.

[19] Figures for 2012 are projected based on the growth rate in the first half of year compared with 2011.


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