In a bid to enhance financial inclusion, the newly launched instant payment platform Higala will look to increase the share of how rural banks in the Philippines engage with digital transactions through the InstaPay online payments processing service.
Owned by Talino Venture Studios and Chemonics International, Higala aims to significantly lower the barriers for rural banks by offering cost-effective onboarding and transaction fees, according to its chief executive.
During the launch event last week, Winston Damarillo, Chief Executive Officer of Talino Venture Studios, outlined the ambitious plan to onboard approximately one hundred financial institutions by the end of 2024.
“In terms of switching fee, we cannot yet disclose the final pricing, but we’re definitely lower than what the market is offering. If you’re a rural bank with P50 million in capitalisation, why spend that 50 million in tech when you can use it somewhere else? It’s very costly,”
Winston said.
He emphasised the current challenge faced by the sector, noting that out of 400 rural banks in the country, only 18 are integrated into the InstaPay system.
This gap in service provision underscores a broader issue of interoperability which, if Higala says if addressed, could unlock the fuller potential of financial services for many Filipinos.
To combat high costs and improve accessibility, Higala will utilise the open-source software Mojaloop to facilitate lower transaction fees. While specific pricing details are still under wraps, Winston assured that they would be highly competitive, with the potential of making Higala one of the most cost-efficient services globally.
The newly launched initiative aligns with the central bank’s efforts to reduce transaction fees and promote digital payments, the company says.
By lowering the costs associated with digital transactions and encouraging broader adoption, Higala hopes to foster an environment where more rural banks can offer modern banking services, thus ensuring that more Filipinos can benefit from the advantages of fully integrated financial services.
Featured image credit: Edited from Higala website
