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LOS ANGELES and MANILA, Philippines, April 29, 2024 /PRNewswire/ -- Talino Venture Studios, an award-winning global venture studio for sustainable innovation, and Chemonics International, a leading sustainable development firm, have launched and seed-funded Higala, the pioneer startup Inclusive Instant Payment System (IIPS) in the Philippines.
As an IIPS, Higala will serve as a financial superhighway that will connect thrift banks, rural banks, and microfinance institutions that are currently excluded from payment networks because of high switching and on-ramp costs.
Despite the presence of 400 rural banks in the Philippines, only a mere 18 are part of InstaPay. This highlights a significant challenge: the lack of interoperability among these banks. As a consequence, the full potential of financial inclusion remains largely untapped, depriving many Filipinos of the benefits that modern banking technologies can offer.
"Higala will help modernize our country's digital financial infrastructures and enable the participation of financial institutions through our network. Our goal is to make banking more inclusive, especially to the underserved segments of the population that have limited access to traditional banking services," Higala President and CEO Vice Catudio said.
Higala promotes inclusion by lowering the cost of real-time payments, which helps financial institutions to reasonably price their instant payments. It also aims to provide inclusive financial solutions to the underbanked as well as rapidly enable merchants to accept digital payments.
"Through Higala's open payment platform and suite of solutions, we will enable new market players to aggressively develop and market innovative payment services to both consumers and merchants," said Catudio."This includes integrating solutions such as regulatory technologies like e-KYC and AML-TF monitoring, AI-based risk detection and management, banking microledgers, payment hub that will enable instant fund transfer across participating banks, and a global transaction gateway for remittance," he adds.
Higala is also building a core instant payment technology that can accommodate financial institutions of all sizes and turn banks into digital banks through white label app services.
Sustainable development
"At Talino, we are committed to the sustainable execution of development that benefits all stakeholders, especially the unbanked," said Talino CEO Winston Damarillo. "With Talino and Chemonics providing funding for Higala, we bring together the impact of venture investing and global good to expand the benefits of financial inclusion to segments that need them most."
"We are excited to embark on a new journey with Higala, a testament to our commitment to innovation and financial inclusion in the Philippines and other dynamic markets across the globe. Drawing from three decades of impactful partnerships and success in the economic growth space in the Philippines, Higala embodies our vision for affordable, real-time transactions accessible to all Filipino communities," said Chemonics President and CEO Jamey Butcher.
The first deployment of Mojaloop in Asia
Higala leverages the open payment platform of Mojaloop Foundation, a nonprofit dedicated to boosting financial inclusion through its open-source software called Mojaloop. With Mojaloop's open payment framework, Higala facilitates seamless connectivity among various financial entities, including banks, institutions, payment gateways, merchants, and the central bank. This approach enhances affordability and accessibility in financial transactions.
"With the pioneering deployment of Mojaloop open source software in Asia through our collaboration with Talino's Higala, the Mojaloop Foundation reaffirms its commitment to breaking down barriers and empowering communities through financial inclusion. Together, we're not just revolutionizing payment systems; we're unlocking opportunities, fostering resilience, and building a future where financial access knows no bounds," said Mojaloop Foundation Executive Director Paula Hunter.
"We want to ensure that everyone is fully banked by lowering the bar of obtaining bank accounts, lowering the friction cost for digital payments, encouraging merchants to accept them, and empowering all financial institutions to be able to provide it to their constituents, especially rural banks," said Damarillo.
Backed by BSP and industry leaders
BSP Deputy Governor Mamerto E. Tangonan said, "The BSP supports continued efforts to enhance the efficiency of the national payment system and help modernize the Philippines' digital payments infrastructure as part of our ongoing efforts to bring more users into the digital payments system."
Tangonan adds, "Adopting modern technologies such as artificial intelligence, machine learning, and compliance with global standards like ISO 20022 can help payment service providers offer new services, improve customer experience, and make digital transactions more safe and secure."
Aside from BSP, Higala's partners and collaborators include the Rizal Commercial Banking Corporation, Xendit, FinTech Alliance.Ph, and the Rural Bankers Association of the Philippines.
"We are committed to inclusivity, affordability, and the innovative approach to transaction management and settlements. Higala provides efficiency and equitability to fully support the nation's move towards comprehensive financial inclusion," Catudio said.
About Talino
Talino Venture Studios is an award-winning global venture studio for inclusive fintech. Born in the intersection of Silicon Valley and Southeast Asia, Talino Venture Studios is on a mission to bridge financial inclusion for over 1.7 billion people around the world. It uses the successful venture studio model to build repeatable, scalable, and profitable fintechs that empower underserved, underrepresented groups around the world with financial access and mobility. Talino Ventures Studios (talinolabs.com)
About Chemonics
Founded in 1975, Chemonics is one of the world's leading global sustainable development consulting firms. With over 6,000 experts in more than 100 countries, 90% of its staff are working in a community they have long-considered home. Chemonics collaborates with communities across the globe to identify and apply innovative, sustainable solutions to the world's biggest challenges. Where Chemonics works, development works. www.chemonics.com
About the Mojaloop Foundation
The Mojaloop Foundation's mission is to increase financial inclusion by empowering organizations creating interoperable payment systems to enable digital financial services for all. To achieve its mission, Mojaloop Foundation operates as a 501(c)(3) charitable nonprofit organization, maintaining its free, open source software, Mojaloop, and community as public goods in the service of financial inclusion. Merchants, banks, providers, government offices and other entities looking to build inclusive payments platforms can use Mojaloop – whole, adapted or as a real-time payments reference model. For more information about the Mojaloop Foundation, visit https://mojaloop.io/.
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