WANT TO MAKE deposits into your bank account without actually dealing with a bank? How about paying bills, or cashing in the money your mother, father, brother or sister sent your from abroad by simply taking a few steps out of your front door?

These things, which used to be impossible unless you lived right in the center of the Makati Central Business District, could soon be the norm for the rest of the populace.

This is the idea behind Globe Telecom Inc.?s plan to create the country?s largest financial services network with the help of its 15,000 vendors.

Globe will turn its sub-dealers, or vendors who distribute products like prepaid credits or SIM cards to be sold to consumers, into cash-in and cash-out points for the company?s electronic money service GCash, creating a network of informal automated teller machines (ATMs) throughout the archipelago.

Globe president and chief executive officer Ernesto Cu said this would help bring vital financial services to poor areas at ?the bottom of the pyramid,? which are outside the reach of local financial institutions.

?Possibly, this will be the most pervasive cash-in and cash-out network in the country. These are like manual ATMs,? Cu told reporters last Tuesday.

Globe subdealers can range from your nearby convenience stores, mall kiosks that sell prepaid credits, to the sari-sari stores you see on every street corner.

The GCash service, which is offered by Globe through subsidiary G-Xchange Inc., allows subscribers to make financial transactions such as making purchases, withdrawals and deposits, using mobile phones.

To avail of these services, subscribers will have to create GCash accounts by registering their mobile phone numbers. The subscriber is then given a virtual ?wallet? which is where the money is stored.

To put money in, subscribers will have to go to so-called cash-in points. The money stored in the wallets may then be used in transactions by using the phone to transfer the money from one wallet to another.

Money in the wallet may also be sent to bank accounts of subscribers, which may be linked to a GCash account as an option.

The amount in these wallets may also be monetized by going to a cash-out point, were the virtual credits are converted into cash.

Cash-in, cash-out points

With the plan to use subdealers as cash-in and cash-out points, Globe plans to effectively triple the reach of the country?s banks.

Bangko Sentral ng Pilipinas (BSP) data show that, as of the end of March this year, there were only 7,909 ATMs in the country.

According to Cu, GCash is now being used to pay bills and forward remittances. It even serves as payrolls of some big employers.

The advantage of using GCash is, a bank branch need not be physically there for a client to avail of its services. And because of this, the costs for using the same services are reduced drastically.

For instance, while fees for sending remittances via wire-transfer services can reach as much as 10 percent of the amount sent, GCash can bring charges down to around two percent.

That?s money instantly saved, which can now be used for more important things like tuition, rice, or that lovely pair of shoes you?ve been eyeing for months.

No collateral

GCash may also eventually be used to extend microfinance loans. Borrowers may also repay their credits using GCash, Cu said.

In fact, using electronic money for microfinance activities has been one of the most popular GCash applications.

Lending small amounts to a farmer with less than a hectare of land to till is not the same as taking out 15-year mortgages from banks.

Microfinance means relatively small amounts are lent to borrowers. This entails no collateral, so lenders tend to want to be repaid rather quickly. That means a few days, and in several installments too. Without the convenience of electronic transactions, this would mean visits to borrowers on a near-daily basis.

This is not only tiring for whoever does the collecting, it is also time-consuming. And, as we all know, time equals money.

By cutting this logistical nightmare out of the equation, creditors need not knock on borrowers? doors every chance they get. Payments can simply be sent from G-wallet to G-wallet.

This also means lower costs, which may mean lower interest rates.

In short, no one gets the short end of the stick.

Vital tool

Microfinance has been tagged by most international institutions, including the World Bank, as a vital tool for poverty alleviation since it provides a boost to budding entrepreneurs in need of funds and allow them to turn their ideas into healthy profits.

?This will likely be the most pervasive financial operation in the country, coupled with the existing network of Globe stores and affiliated pawnshops and other stores,? which double as cash-in and cash-out points, Cu said.

With the exception of some rural lenders, most financial institutions are concentrated in urban areas like Metro Manila and Cebu.

This is where GCash gets to fill the void. Aside from bringing down costs and offering absolute convenience to those who use it, GCash will be present in areas where financial services are often absent.

The extensive reach of GCash will be vital for a country where about a third of the population is poor.

According to Cu, telecommunications have always been at the forefront of transforming the Philippine countryside.

Transformation

?(With cheap and reliable) mobile telephony services, we provided the first phase of transformation for the people at the bottom of the pyramid. We are now ... [at] the second level of transformation by making mobile broadband accessible to everyone,? Cu said.

?Our third phase of transformation is using financial services. Today, the bottom of the pyramid is excluded, and we?re hoping we can include them with our mobile money transfer systems,? he said.

Fespite being the affiliate of one of the country?s biggest banks?the 150-year-old Bank of the Philippine Islands?GCash hopes to provide a service that will benefit not only its principals.

Globe has partnered with over 50 banks to serve 120,000 GCash subscribers. The volume of transactions has also reportedly reached P5 billion.

?This is open to all banks,? Cu said of Globe?s services.