ING Philippines will set up a fully-digital loan application early next year and it will be one of the first online-only banks to offer loan products in the country.
The Dutch bank on Tuesday launched its no-fees payment account ING Pay to “empower customers as they look for a safer and more efficient way to make payments and transactions in the midst of the pandemic,” said Hans Sicat, ING country manager. ING Pay is its second major product, after ING Save account introduced in 2018.
Sicat said the launch of the 100 percent digital ING Pay “is a major milestone in driving further usage of digital banking services and transactions” and it will promote financial inclusion and digitalization in the Philippines.
In December last year though, before the COVID-19 health crisis was declared a global pandemic, Sicat already announced that after the payment account is launched, the consumer loan products will be next. The pandemic delayed the launching of these two products.
“You can expect that (consumer lending) in the course of 2021,” Mohamed Keraine, the bank’s head of retail, said during Tuesday’s virtual launch of ING Pay. The loan products is expected to be onboard within the first half of 2021.
The bank’s number of corporate and retail customers have been steadily growing, said Sicat. “On our corporate clients – even with this (pandemic) lockdown – I think we have a great rate of success of servicing a lot of corporate clients.” He expects the same for the retail consumer lending.
“The satisfied and happy customers have doubled since last year,” said Keraine. “We also have 10x more balances than we have last year.”
Similar with its savings account, Keraine said ING Pay account has a high interest rate, and it will have no minimum opening balance and maintaining balance.
For now, Keraine said they could offer the payment account free of any charges, and no transfer fees such as when using PESONet and InstaPay. There are also no minimum spend per transaction and they offer total cash back rewards of up to P50,000.
The digital bank has registered two million downloads since it was launched with 50 million interactions on their mobile app. About 6,000 connections per day are recorded.
The bank will offer free transfers “for the time being,” said Keraine, and guarantees that the no-fees transactions will be extended for an indefinite period. “(There are) no plans to introduce any fees,” he said. For two years, ING has waived fees for accounts opening and fund transfers.
ING Pay has more than 70 pre-enrolled billers and merchants, including major utilities, credit cards, insurance and telecommunication companies. Customers will also have a virtual and physical debit card that they can freeze or unfreeze for added security, as well as adjust the daily transfer limit.
The ING Save account and ING Pay are both bank accounts but are separate products, however funds can be transferred from one to the other at no charge. As a payment account, not an e-wallet, it can be used for all payments and transactions such as salary and financial management using the ING mobile app.
As a digital bank in the current setup, Sicat said they are “engaging” the Bangko Sentral ng Pilipinas (BSP) which is about to release the guidelines for entities that will apply for a new digital banking license. “We’ve been very much working with the BSP in terms of trying to figure out what the appropriate framework (for digital bank),” he said.
During the launch of ING Pay, BSP Governor Benjamin E. Diokno said he is “glad that ING joins the roster of banks that maximize the use of our current payment streams, InstaPay and the PESONet, for the benefit of their clients.”
The BSP chief, who has been calling on banks to continue to offer digital payments without fees, said he is also “very grateful to ING for helping us encourage the use of e- payment services by offering these services for free.”
Diokno however said that the road to a digitally-powered national payment system is “long and bumpy” that “requires unceasing collaboration between the BSP and the other payment service providers.”
The BSP is targeting to have 50 percent of all retail payments to go digital and about 70 percent of adult Filipinos with formal accounts as early as end-2022.
“We aim to convert 50 percent of the total volume of retail payments into digital form. Knowing that a transaction account is a pre-requisite for initiating digital payments, this first objective involves expanding the proportion of financially included to 70 percent of Filipino adults,” said Diokno.
ING the global bank has 39 million customers and are fully digital in 14 markets including the Philippines, out of 40 countries that they have operations. The Dutch bank has been in the country since 1990 and in 2018, they became an all-digital bank.