Few markets have seen activity like the Philippines Bitcoin space in recent years. From the first remittance services developed as a niche concept, the country is now home to a whole ecosystem of crypto-focused startups, offering unparalleled flexibility for its users, many of whom are only just becoming aware of its existence.
While this may seem like a paradox – building and diversifying a market whose consumers are mostly unaware of its uses – an increasing number of market participants are already looking to the long-term with confidence.
Preempting demand
Like many developing economies, the Philippines has been a hub of remittance in particular in recent years. With the arrival of Bitcoin, a range of remittance-focused startups have started operations, targeting anyone from the US and Canada to elsewhere in Asia, all on the premise that Bitcoin is simply much cheaper and faster than the traditional fiat-based alternatives such as Western Union, Moneygram or snail-mail bank transfer.
The pace of change within this market is brisk. Individual operators such as Coins.ph, a spin-off of its original Thai counterpart, have eyed the potential for cryptocurrency uptake in the Philippines and the wider Southeast Asian space, which with a GDP of over US$2.1 trillion has credit card penetration of just 5% among a population of 610 million.
Elsewhere, however, others are already seeking to go beyond the standard remittance model, penetrating new market sectors to give users the flexibility already being offered from various separate entities.
Paylance.ph, a startup whose primary focus is remittance to the Philippines, has sought to integrate additional functions into its operation to take advantage of the slowly-maturing public interest in cryptocurrencies.
Paylance’s ventures into the gaming space have seen them integrate a tipping and Bitcoin earning feature in games such as Oh Crop! enabling players to earn BTC while playing, and tip others. Funds accrued can even be spent via selected merchants directly via Paylance thanks to integrations with a range of Filipino online merchants.
“Remittance was the core service of Paylance but we want to expand our offerings into a more tech-focused product, as opposed to just a Bitcoin service,” CEO Jay Villarante told Cointelegraph. “Our developers’ background gives us first-hand experience in seeing what the barriers to entry are for many gamers (in Asia) when they try to purchase something online.”
“For merchant support, we’ve been asked a lot by our existing clients and partners, so we came about creating our private API for them so they can accept Bitcoin payments. Today, we’re currently at around 2,500 merchants.”
- Paylance Team: Mark Sargento (backend engineer), Jeff Buenaflor (frontend engineer), Jay Villarante (CEO) and John Bryan Tan (operations lead)
‘No barriers’
This early success, coming despite Villarante noting Filipino consumers “still lack the knowledge with regards to where to get bitcoin and how to use it,” is demonstrated by the 35 thousand Bitcoin users gathered through the Oh Crop! implementation in its first 3 weeks alone, with transactions across Paylance’s operations from 2014-15 running into the millions of dollars.
“We expect the gaming tips concept to gain a lot of traction in the game development industry as more users will be driven to spend more on the game because of the bitcoin tips that they’ll get,” he continued. “Although we have yet seen how this will grow as we’re still experimenting on the concept, we have already seen huge traction since we launched our own bitcoin tipping feature for Oh Crop!”
But it’s not all plain sailing. Scams and a general lack of education among users still pose a risk to security and risks alienating entry-level consumers. The situation in the Philippines at present could be likened to one’s initial experiments with the Internet: infinite possibilities, without knowledge or understanding of the dangers or potential consequences of ignoring those dangers.
Villarante however remains upbeat, saying:
“Despite the downsides of bitcoins in the Southeast Asian market, bitcoins are easier to get more than credit cards and debit cards for the general public since there’s almost no barrier to entry, especially to the unbanked. It’s an option that may not be significant in Western markets where most people are already used to cashless transactions.”