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While cash is still king in Southeast Asia, Japan-originated JCB Co. Ltd. continues to expand its presence in the region particularly the Philippines, helping transform the country into a cash-lite society from a cash-heavy one.
Japan’s only international payment brand has partnered with Malaysian fintech startup Soft Space early this year to further expand its market share in the Philippines, Indonesia, Vietnam and Thailand.
By combining JCB’s network and the technology of Kuala Lumpur-based Soft Space, the Japanese credit card company aims to provide new value and solutions to customers, particularly banks and cardholders.
“In countries such as Vietnam, Indonesia, and Philippines where cash is still the main source of payment, JCB hopes to contribute to a cashless society by working with Soft Space to make payment activities more convenient for consumers,” JCB said.
Smartphone-based marketing solutions
JCB invested about $5 million in Soft Space and granted the fintech a license to issue JCB cards and acquire merchants in Malaysia.
The company believes that it can leverage on Soft Space’s technology to provide smartphone-based marketing solutions with the rate of bank account ownership, high mobile phone penetration, and low credit card penetration in Southeast Asia.
JCB cards are currently used by more than 140 million cardholders, most of whom are based in Asia.
The partnership with Soft Space is an offshoot of the establishment of its ASEAN Business Enhancement and Creation Department in Singapore via JCB International Asia Pacific Pte. Ltd. in June last year.
The department seeks to offer further convenient and high-quality services to its customers through building new partnerships including investments in ASEAN, and at the same time create new business opportunities beyond the framework of its current payment business.
To achieve this, JCB aims to further accelerate the development of new payment services through strategic partnerships with local financial institutions and start-ups and with Japanese companies operating in the rapidly growing ASEAN region.
Consumers foregoing cash amid pandemic
Consumer behaviors changed dramatically during the height of the pandemic, as more people embraced contactless payments to avoid contracting the virus.
Indeed, the global health crisis also served as a global wake-up call on the importance of having a safe, efficient and inclusive digital ecosystem that supports the smooth flow of funds to facilitate the seamless performance of various economic activities.
In the Philippines, the Bangko Sentral ng Pilipinas (BSP) is pursuing a cash-lite economy through its Digital Payments Transformation Roadmap that aims to convert 50 percent of total retail transactions to electronic channels by 2023.
Initial estimates made by the BSP showed the share of digital payments to total retail transactions increased significantly to 30 percent in 2021 from 20.1 percent in 2020 and only one percent in 2013.
Great efforts in promoting interoperability in the country, through the National Retail Payment System (NRPS) launched in 2015, helped paved the way in allowing many Filipinos to leverage on the benefits of digital payments in times of crisis.
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Editor’s Note: BrandedUp is designed to provide you with insightful, inspiring and educational content created by PhilSTAR L!fe in collaboration with brands like JCB Philippines.