Inclusive instant payments system Higala launches in the Philippines

Ellie Duncan
01 May 2024

A new inclusive instant payment system being pioneered in the Philippines has launched, with seed funding from Talino Venture Studios and Chemonics International.

Called Higala, the Inclusive Instant Payment System (IIPS) will act as a “financial superway”, connecting thrift banks, rural banks and microfinance institutions, which are currently excluded from payment networks due to high switching and on-ramp costs.

There are around 400 rural banks in the Philippines, although only 18 of those are part of InstaPay, which is an electronic fund transfer service that allows customers to transfer funds almost instantly between accounts of participating banks and non-bank e-money issuers in the Philippines.

Higala aims to lower the cost of real-time payments to enable financial institutions to price their instant payments more “reasonably” and offer inclusive financial services to the underbanked.

By leveraging the open payment platform of Mojaloop Foundation, Higala will be able to facilitate “seamless connectivity” among banks, institutions, payment gateways, merchants, and the central bank.

“Higala will help modernise our country’s digital financial infrastructures and enable the participation of financial institutions through our network,” said Vice Catudio, president and chief executive officer of Higala.

“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,” added Catudio.

“This includes integrating solutions such as regulatory technologies like e-KYC and AML-TF monitoring, AI-based risk detection and management, banking micro-ledgers, payment hubs that will enable instant fund transfer across participating banks, and a global transaction gateway for remittance.”

Higala’s partners and collaborators include Bangko Sentral ng Pilipinas (BSP), the Rizal Commercial Banking Corporation, Xendit, FinTech Alliance.Ph, and the Rural Bankers Association of the Philippines.

BSP Deputy Governor Mamerto E. Tangonan, said: “The BSP supports continued efforts to enhance the efficiency of the national payment system and help modernise the Philippines’ digital payments infrastructure as part of our ongoing efforts to bring more users into the digital payments system.”

Talino chief executive officer Winston Damarillo added: “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.”