Rural banks in the Philippines should embrace the digital world through blockchain to empower their clients with various online payment solutions, according to Justo Ortiz, chairman of the newly created Blockchain Association of the Philippines (BAP).
Ortiz said that blockchain is the white knight that can help small lenders compete in the electronic payments solutions space. Currently, most of the 490 rural banks still use analog systems.
Unlike universal and savings banks, rural lenders are left behind in the electronic payments arena because only a handful belong to Megalink or Bancnet consortia. These two interbank networks allow customers to withdraw money and transact with cash machines of their fellow member-banks, among others.
Also, all rural lenders do not belong to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which allows banks to send and receive information about financial transactions globally.
As a result of these drawbacks, BAP has been prompted to launch Project i2i, a real time, cost-effective, and secure retail payment system based on the blockchain platform. It will also connect rural lenders to the Philippines’ main financial network.
?RBs are critical piece of infrastructure. If we don’t act to help them, their numbers will continue to dwindle,? said Ortiz, who is also chairman of Unionbank of the Philippines, during the launch of BAP last May 21, 2018.
To take advantage of blockchain technology, an interested rural lender must notify the BAP so the latter can send a technician to hook up their system. Once linked, the lender will receive a pita, the digital coin that must be exchanged for pesos so that rural banks that agree to embrace the technology can start transacting online.
“It’s like being a member of the Philippine Clearing House Corp. the cheaper way,” the bank executive said.
Five RBs, led by Cantilan Bank, the biggest in Caraga region, have signified their intention to hook up to BAP. The top banks in this classification ? Rang-ay, Camalig Bank, One Network Bank, and Card Bank have also welcomed the Project i2i. ? Ayed Sison