Smart Money, an early leader in the country's e-wallet market, is being piloted among MVP Group employees, signaling a potential return to the market and a bid to recapture lost market share.
In a press briefing on Thursday, Feb. 27, Smart Communications Chief Operating Officer Anastacio Martirez said the end goal of this pilot run is to reaffirm the legacy of what was once an unformidable player in the fintech space.
“At this point in time, we are actually piloting Smart Money, but specifically aimed at the employees of the MVP Group companies. So, we're trying to get some learnings from that,” said Martirez.
“But of course, the aspiration is to grow it to the scale that it was before because this is our legacy. This is the legacy of the mobile network of Smart. This is our legacy,” he added.
Launched in the early 2000s, Smart Money allowed users to make cashless transactions via SMS.
It was hailed then as the world’s first reloadable cash payment card linked to a mobile phone, competing head-to-head with GCash offered by rival Globe Telecom, which is now the market leader.
Smart Money was decommissioned in 2016 in favor of PayMaya, which has since been rebranded to Maya—now also a digital bank licensed by the Bangko Sentral ng Pilipinas (BSP).
“We have aspirations because the aspirations are founded on the fact that back in the day, early years of Smart, Smart was the first telco to have introduced Smart Money, the first digital wallet in the world,” noted Martirez.
“We are very proud about that. Like I said, that is our legacy. We want to rebirth it and we want to get back the market share that we used to have,” he emphasized.
When asked about the potential rollout of Smart Money to the public, Martirez said: “Can I say, abangan (stay tuned)?”
Smart Money’s comeback is expected to reignite a battle for the market share now dominated by GCash.
Operated by Globe Fintech Innovations Inc. (Mynt), GCash has registered approximately 94 million Filipinos—or to put in another context, around 80 percent of the entire population of the Philippines.
What about Maya?
With Smart Money’s potential return, the big question now is: what will happen to Maya?
Last year, Maya recorded group-wide profitability, with its banking customer base growing to 5.4 million and its borrower base to 1.6 million.
Maya maintained its position as the top digital bank in terms of deposit balance and bank customers, as well as having the largest market share in card acquiring and QR Ph transactions.
Notably, Smart's parent company, PLDT, only holds an about 40 percent stake in Maya. Other investors own the remaining shares, with American private equity firm KKR owning about 30 percent.
Manuel V. Pangilinan, chairman and chief executive officer of Smart and PLDT, told reporters that they are interested in increasing their stake in Maya.
Gaining control of Maya would mean that PLDT would have more power to assert its position in the market share against the dominant GCash.
Based on reports, KKR has recently appointed investment firm Goldman Sachs to facilitate the sale of its minority stake in Maya.
Reuters said that if the potential sale goes through, it could value Maya at more than $2 billion.
Two wallets?
Now, if PLDT gains control of Maya, what would it mean to Smart Money?
“At the end we will find out what we will do with Smart Money or Maya. And I think it will turn on what KKR wants to do at the end,” said Pangilinan.
“Because for now, management essentially of Maya is with them. It's not really with us. We've taken a backseat position with respect to the management committee,” he continued.
Pangilinan added that if KKR completely sells out its stake of 30 percent, PLDT will then take over the management, deciding the fate of both e-wallets.
“You cannot have two wallets. You can only have one.” the business mogul said.
“We're waiting for developments on that side, for us to give you definitive answers to what we do with either Maya or Smart Money,” he explained.