About the Company

NextPay is a Y-combinator funded fintech platform that is based in the Philippines

Context / Challenge

As a digital banking solution that facilitates payments to all major banks and e-wallets, there is still a sizable opportunity to tap the unbanked in the Philippines especially as:

• as of 2019, more than 60% of the Filipino population remains unbanked (estimated around 51.2 million people) and
• a lot of Filipinos still remain off-the-grid especially those living in rural areas or in areas where signals are remotely available

My Proposed Solution

A good opportunity to expand the market scope and therefore increase the reach of NextPay was to consider an alternative solution where we can reach businesses that send money to unbanked recipients or recipients who are located in far flung areas.

At that time, NextPay was considering a third party solution provider that offers POS terminals including physical cards that can be given to payees for accepting payments and for cashing out money in dedicated POS terminals (which would be stationed at sari-sari stores).

After conducing a SWOT analysis for this provider, I have suggested that going with them would be unwise at this point as:

• There is no existing network yet that would be provided by this vendor. This means that it would be NextPay’s job to set up the partner channels and establish relationships from scratch
• POS terminals cost a fortune (i.e. provider selling per POS terminal at $200 each) which the sari-sari stores would not be able to pay for, therefore, forcing NextPay to initially front the costs and
• Philippines ultimately is still a cash heavy society, and so Filipinos would typically still want to cash out any payments from the cards (which would mean, it would also be up to NextPay to ensure that the card is accredited by BancNet in addition to Filipinos having to line up in ATMs to cash out their payments)

I looked for an alternative provider, and was able to find a match where the offered services are a match to what we are trying to achieve in the company, and where we expend the least amount of effort as possible to get the product off the ground.

This meant a wide enough network, an API that would allow us to send money to thousands of their remittance partners, and the ability to earn from transaction fees. This would strategically expand the reach of the company by tapping the unbanked and off-the-grid population in the Philippines.

Results

Currently, existing business users use the remittance option as a way to donate to their employees affected by the calamities (i.e. recently, Cebu has been hit hard by the typhoon Odette).