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Financial access amid pandemic via handheld ATMs

Every Filipino should enjoy financial access, even if they live in far-flung areas, according to ENCASH President Mike Mapa.
Every Filipino should enjoy financial access even if they live in far-flung areas, according to ENCASH President Mike Mapa.

With the government-imposed enhanced community quarantine (ECQ) now on its fifth week, financial access has become even more crucial for households. To address this pressing need, fintech company ENCASH has lent its SuperPOS handheld ATMs to rural banks, cooperatives, and town halls to ensure easy access to cash. This has become particularly helpful for the ongoing distribution of the government’s Pantawid Pamilyang Pilipino Program (4Ps) releases.

Launched in 2006, ENCASH is the first independent ATM deployer in the Philippines. It supplies ATM terminals, transaction switching systems, mobile POS, and the recently rolled out SuperPOS. This is a handheld ATM that has both cash in and cash out functions.

Providing financial access in rural areas

The ECQ has led to an influx of transactions across over 1,200 of ENCASH’s sites. ENCASH is making sure that these sites will remain operational. It has also committed to rush settlements as much as possible and closely monitor the cash balances of their deployed ATMs. “We are lucky to be working with partners who share in the same vision and are employing extra measures in light of the current crisis,” Mike Mapa, president of ENCASH, said in a press statement.

Mapa told Digital Life Asia via email that he founded ENCASH to address the lack of ATMs in the Philippines. He said that they used to distribute ATMS to commercial banks. Mapa, however, learned of a new business model when he attended a conference abroad. He found out that private companies were purchasing and placing ATMS at gas stations and other convenient locations.

He noted that in the Philippines, most ATMs are in urban and developed areas.

“We realized that there was a big lack of access in the rural areas and so we became more driven to supply to those areas. We saw an opportunity in the remote locations and it opened us up to a then undiscovered market, but we needed to develop a business model based on their needs.

“Getting cash in rural areas is truly a different story. There were testimonials from the rural community where people would spend Php500 for a boat ride or a habal habal ride just to withdraw cash. There were also senior citizens receiving their SSS pension who would rent a van just to get their pension. And then there’s the teachers and 4Ps recipients receiving salary and grants through their ATM cards,” Mapa said.

Financial access for the community

These privately-owned ATM terminals and mPOS devices are a boon for communities in areas that commercial banks deem unviable. With the help of ENCASH and its partners, users in remote locations can conveniently obtain access to their finances.

“ATMs are expensive and smaller banks preferred not to buy their own. There were also technical expertise and infrastructure concerns to run ATMs that needed to be addressed. So, we began looking for investors and adapted the US system of charging fees per transaction. We tested the model on pilot at a rural bank, a diving resort in Puerto Galera, and a KTV in Metro Manila. During the pilot, we saw people lining up and willing to cover the convenience fee. That’s when we knew we had the right business model to offer.

“While our partners’ businesses grew, accessing cash also became less of a hurdle to the communities that our partners service. In our case, what started as a business naturally evolved into social responsibility—of making the field equal by serving more unbanked and underserved communities,” Mapa said.

Mapa said that ENCASH had to overcome a number of challenges. For one, people thought then that only banks could purchase ATMs. Fortunately, the Bangko Sentral ng Pilipinas granted them permission to operate. They also needed to source funds because ATMs and their support systems are expensive. Lastly, ENCASH had to get the right technology to support their business model and communities.

The road to cashless payments

Will ATMs always be needed, given the push toward cashless payments?

Mapa stressed that financial services need to be nuanced in order to address the actual needs of communities.

“The transition to cashless payments still requires the presence of ATMs at the moment. Given that the country is an archipelago and each community is different in terms of where they’re at in terms of financial access, their needs are also different.

“The ATM functions are still relevant here in the Philippines. Recent surveys tell us that more than half of the population is still unbanked. The current transaction volumes are not going down. In fact, they are going up,” he said.

Mapa, however, said that ENCASH supports the transition to cashless payments with its other products.

“In the future, ATMs may possibly be phased out, and our products—like the SuperPOS—are ready for that transition. But right now, numerous communities are still getting their cash through ATMs,” Mapa said.

In the end, overcoming this crisis not only means protecting Filipinos from the virus, but also addressing their financial needs.

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