MANILA, Philippines – Globe Telecom, through its GCash service, teamed up with global firm PayPal to make it easier for entrepreneurs and freelancers to access online payments.
The partnership, announced on Wednesday, February 8, gives Filipino PayPal users a more convenient way to withdraw and transfer funds from their account by linking to a GCash account.
Linking the accounts would give PayPal users the ability to access their funds through GCash, transfer PayPal balances to GCash, and withdraw them from automated teller machines (ATMs) and Globe partner outlets through the GCash Mastercard.
"The main benefit to this is that users, especially micro and small enterprises and freelancers, can now withdraw funds within a day at zero cost," said John Rubio, chief executive officer of Globe's financial technology arm Mynt, during the launch of the partnership.
Previously, micro, small, and medium enterprise (MSME) owners and freelancers who transferred PayPal balances to their bank accounts would have to wait several days to be able to withdraw the cash. They would also be charged corresponding transfer and withdrawal fees.
Unlike developed countries, the Philippines does not yet have fully developed financial infrastructure for seamless transfers between institutions. As a result, many intermediaries have to fill that role and add fees, explained Rubio.
Rubio did point out that in some instances, if users withdraw through ATMs, there may be a P15 non-bank card fee. But this fee is smaller compared to the previous charges, which he said could easily range from 5% to 10% of the withdrawal amount.
"The initial market we are looking at is the freelancer market that already has about 1.4 million. But you don't stop there – the entrepreneurial community is growing everyday," Rubio added.
PayPal, for its part, is "very, very optimistic" about the Philippines.
"It is the fastest growing market in Southeast Asia by far with tens of thousands of freelancers using PayPal to get money from overseas," said Rahul Singhal, PayPal general manager for Southeast Asia.
PayPal, with its estimated global customer base of 197 million, has been cultivating partnerships in the country. It also sealed a similar deal with PLDT's PayMaya.
"The [freelancer] phenomena is very pronounced here, with 1.4 million freelancers out of a total of 100 million, that's almost 1.5% of the population. There's nowhere else in the world where you will see such a high proportion of freelancers," Singhal added.
Globe CEO Ernest Cu said the estimated 1.4 million freelancers come from all social backgrounds. A good proportion of them, he added, could face problems with international transfers since they may not have bank accounts or bank accounts linked to PayPal.
"So we've tried to solve that problem by leveraging the strength of PayPal, almost the de facto standard for ewallet type transactions internationally, with Globe's distribution network here in the Philippines," Cu said.
Globe has more than 12,000 partner outlets where GCash withdrawals and deposits can be made nationwide.
Cu added that Globe's partnership with PayPal is just in the first phase, with more to come. – Rappler.com