Higala, a new inclusive instant payment system (IIPS), has launched in the Philippines in an effort to lower the cost of real-time payments for the country’s financially excluded.
Higala instant payment system launches in the Philippines
Described as a “financial superhighway”, the payment system has been built to connect thrift banks, rural banks and microfinance institutions currently operating financial services in the country to instant payments.
The start-up says that of the 400 rural banks operating in the Philippines, only 4.5% are actively subscribed to InstaPay, the electronic fund transfer service launched by the Bangko Sentral ng Pilipinas (BSP) in April 2018.
Higala says that the high switching and on-ramp costs have so far culminated in smaller banks being excluded from national payment networks, limiting the availability of these financial services for their customers.
Higala seeks to combat this by making real-time and instant payments more accessible for both consumers and merchants. It is also building a range of white-label app services with core instant payment technology to fuel the digital transformation initiatives of participating banks.
The system has been launched and seed-funded by Talino Venture Studios and US-based development firm Chemonics International using the open source payment platform Mojaloop, which will support connectivity between banks, institutions, payment gateways, merchants and the central bank.
Vice Catudio, president and CEO of Higala, says the system will “help modernise our country’s digital financial infrastructures and enable the participation of financial institutions through our network”.
“We will enable new market players to aggressively develop and market innovative payment services to both consumers and merchants,” he continues.
“This includes integrating solutions such as regulatory technologies like e-KYC and AML-TF monitoring, AI-based risk detection and management, banking microledgers, a payment hub that will enable instant fund transfer across participating banks, and a global transaction gateway for remittance.”
Winston Damarillo, CEO of Talino, adds: “We want to ensure that everyone is fully banked by lowering the bar of obtaining bank accounts, lowering the friction cost for digital payments, encouraging merchants to accept them, and empowering all financial institutions to be able to provide it to their constituents, especially rural banks.”
