Philippines-based Rizal Commercial Banking Corp (RCBC) is teaming up with two Japanese banks under the umbrella of Resona Holdings to roll out a blockchain remittance service to deliver faster and more cost-effective money transfers in the region.
RCBC identified its partners as Osaka-based Kansai Urban Banking Corp and Kobe-based Minato Bank.
Manny Narciso, senior VP at RCBC, said during the launch:
“We want to serve the OFWs [overseas Filipino workers] in Japan through this technology and we’re doing it in partnership with two Japanese banks. For the OFWs in Japan, the service will make remittance faster and cheaper as we will collect less fees.”
He added that RCBC’s alliance with Resona was the result of the growing business opportunities in the Philippines.
“We have a partnership already with Resona and we’re looking at them as our first option,” Narciso said.
Initially, the service would be offered to OFWs based in Japan, but Japanese nationals could also avail themselves of the new technology to send money to the Philippines, Narciso said.
He added that using blockchain technology would eliminate the need for third-party services, like the SWIFT network, and make money transfers faster and cheaper. Moreover, transactions from Japan will now happen in real time because they would not pass through all the other parties.
According to Narciso, the choice of Japan for the launch of the blockchain remittance service is due to the volume of remittances coming from that country to the Philippines. In fact, Japan is the largest source of money transfer in Asia, he added.
Data from the Philippine central bank showed that Filipino workers in Japan sent home $137.4 million in total last month, which is the highest amount in the region.
For its blockchain infrastructure, the Yuchengco-led lender has tapped IBM and another partner that Narciso did not identify.
“IBM has decided to pilot it with 15 banks around the world, we’re the only one in the Philippines that they included in this pilot test,” he noted.
Philippine banks join hands for Visa blockchain payments
Philippine banks are embracing blockchain technology not only for remittance services but credit card payments as well.
In February this year, UnionBank of the Philippines led a partnership to adopt Visa's blockchain payment platform.
Henry Rhoel Aguda, head of technology and operations of UnionBank, said his company had inked a deal with four rural lenders to join the platform to provide a more efficient service to smaller players.