Philippine banks link up to pilot blockchain for retail payments

A major lender is connecting with rural banks in the Southern area of the country.

Major Philippine lender UnionBank of the Philippines is leveraging on distributed ledger technologies of software firm ConsenSY to connect with five rural banks in the southern area of the country for a blockchain pilot that aims roll out real-time retail payments.

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The i2i project aims connect rural banks into the larger financial network and promote financial inclusion in a country where over a third (34.9%) of 1,634 local government units remain unbanked.

The five rural lenders chosen to pilot the blockchain initiative include Cantilan Bank, Inc. of Surigao del Sur, PR Savings Bank, City Savings Bank, FairBank, and Progressive Bank.

"The i2i Project is a real-time, cost-effective and secure retail payment system in the blockchain," said UnionBank chair Justo Ortiz. He also said the blockchain can help "crack the hole of financial inclusivity." ConsenSy leverages on Kaleido platform which is the first blockchain utilising the Ethereum network that allows enterprises to implement the blockchain in a more accessible way that still takes into account robustness, security, and performance.

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UnionBank has been steadily working on digitising its operations after forging a partnership with global fintech provider FIS to enhance its commercial lending processes including origination and credit assessment, liquidity and capital charge of loans and portfolios, data management and reporting.