Philippines based Security Bank has approached re-launched their NFC strategy with Sweep Card. The bank’s strategy to reach out to retail customers through their partnership with local retailer San Miguel has sparked interest in a card-receptive market. Sruti Rao reports
Adoption of NFC cards has increased in the Philippines recently and well established banks in the market are rolling out NFC enabled cards to a limited group of retailers.
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However, for Security Bank this is seen as a service limitation due to the closed loop structure, explains Dennis Joy Ejercito, head of cash management services.
Ejercito explains to CI: "There are other banks who have already started using NFC based products in the Philippines. Bank of the Philippine Islands, for example, has teamed up with Jollybean, a fast food franchise, to create a closed-loop tap card."
While this has been the norm in the Philippines, Security Bank was keen to move towards an open loop style of contactless card to better open up the market.
Food and beverage company San Miguel approached the bank through their subsidiary Auto Sweep Post to create an open NFC-enabled card that offers banking services to their retail customers.
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By GlobalDataSecurity Bank launched the Sweep Card in February 2014 allowing customer to tap-and-pay across retail outlets, and provide ATM withdrawal, bill payments and access to a bank account at Security Bank.
The programme has been shortlisted for the Retail Banker International Asia Trailblazers awards 2014 for ‘Excellence in Payment Innovation’ and has seen growing demand in the months before launch among existing bank customers and the larger market.
Henry Navarro head of debit cards at Security bank explains that this brings greater convenience for the customer with the multiple access points that the card can be used for and allows the bank to gain access to retail customers under their partner’s network, to incorporate into their client base.
Navarro says: "First of all, we wanted to increase the relevance of our product offering. We were able to achieve that because the card can be used in different sectors – from restaurants, groceries and even the transport sector.
"Filipinos want everything in one card"
"They are also looking at implementing this via public transport. And ofcourse, you can also use the card for banking, with partnership with us. We are soon launching the facility for this card to pay toll fees as well."
"The second objective would be related to our focus on financial inclusion. The primary target of the San Miguel Corporation would be to offer the product to the general public. Most of their initial target markets are the under-banked or unbanked."
Ejercito adds: "If you are a Sweep card holder, you have the opportunity to open an account with Security bank without the hassle and procedures of opening an account, because by having the card, we already have your basic KYC information."
The all-in-one approach
The Philippinnes cards market has evidently seen an uptake in card usage in the country. Navarro highlights that Filipino customers prioritize ease and convenience in their payment decisions.
Navarro says: "We are banking on the ‘buffet’ mentality of Filipinos. They want everything in one offering in one card."
The common problem in the Philippines of poor communication lines is bypassed by Sweep card due to an offline facility, allowing customers to use the card when system is down.
Navarro explains: "Communication lines are quite challenging in Philippines. To perform a POS transaction, you get a lot of rejected transactions because of communication errors. With this new technology, we are able to grant payments even through offline POS."
The bank believes that the traditional challenge of getting customers to adopt contactless transactions will be overcome by the option to use the card with multiple retailers.
The future of the Sweep card
Security Bank has plans to broaden the Sweep card product by adding the option for online remittance and mobile wallet capability.
Building a customer base through retailers has proven to be effective for the bank, while at the same time increasing the quality of service to their existing customers.
Security Bank is the eighth largest bank in the Philippines in terms of assets with a 4% market share in a 36 strong retail bank market. The bank has 218 branches across the Philippines and a network of 350 ATMs.
