Manila's Peppermint flavoured financial inclusion

Successful Australian fintechs should be aiming to achieve regional financial inclusion rather than Silicon Valley celebrity, according to the Manila-bound managing director and chief executive of Peppermint Innovation.

Chris Kain’s ASX-listed Peppermint Innovations last week secured Central Bank of the Philippines (Bangko Sentral ng Pilipinas or BSP) approval to run a fully-developed tech live-trial with in-country partner MyWeps.

For Peppermint’s mobile bill pay and money remittance technology, MyWeps will plug the fintech directly into one of the Philippines’ largest multi-level marketing businesses, 1 Bro Global, with over 90,000 agents able to deploy across vast mobile networks.

“There are hundreds of millions of people across South East Asia who face problems that most Australians haven’t even thought of, like the one we’re solving in the Philippines about how to send money and pay bills without a bank account,” Kain said.

According to the Perth-based chief executive, 500 MyWeps agents will conduct the trial over a three-month period. The process will then look to proliferate through all 90,000 agents across the 1 Bro Global complex.

“The pilot will be the first of its kind, and we believe it supports the National Strategy on Financial Inclusion which has a key focus of providing services to the unbanked.”

According to Kain (pictured on the left with brother Anthony), the Peppermint technology is looking to provide an innovative, commercially viable answer to the problems experienced everyday by the almost 75 million Filipino’s who still cannot access a bank account.

The Philippines’ cash economy, spread-eagled across an archipelago of 7000 islands, is in reality an almost impossible remittance task.

In December, official cash remittance payments from Overseas Filipino Workers (OFW) alone grew (3.6 per cent) to a record US$2.6 billion, but these are likely a fraction of the true annual total sent by more than 10.2 million OFWs. The Asian Bankers Association (ABA) estimates remittances through both unofficial and illegal channels are in fact about 40 per cent higher than the official BSP figure.


Forget Silicon Valley

According to the latest World Bank data, 69 per cent of Filipinos are under or unbanked, yet, in the same breath, the Philippines can boast the fastest-growing smartphone market in Asia.

“The Philippines is an interesting market because almost everyone has a mobile phone, but traditionally it’s been hard to visit a bank branch in person because the country is made up of more than 7000 islands," said Kain.

“To be honest, I think solving these challenges right on our doorstep and developing technology that will make a real change in people’s lives is more exciting than wanting to be the 'next big thing' in Silicon Valley - which is a bit of a cliche.

“Support for the idea of financial inclusion in developing nations has been growing in the past few years, from organisations all the way up to the World Bank.”

For outward-looking Australian fintechs, Kain said the commercial opportunities in the Philippines - indeed across much of ASEAN - are often as great as the societal needs.

“I think Australian fintechs should be looking at how they can take part in this movement in the countries with huge populations that are right next door.”

The Asian Development Bank (ADB), in a report released in January, suggested that digital technology like Peppermint’s mobile payments and remittance tool that promotes financial inclusion can increase GDP by as much as six per cent for ASEAN economies.

“Aiming to make people’s lives easier in Asia is also a much smarter business move, because if you can do it your product will be much more scaleable than it would be in Australia or the US,” Kain said.

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