Tagcash takes on cashless economy mission in Philippines

Many may still find it hard to imagine of having a high-tech cashless society in an emerging market like the Philippines, but for technopreneur Mark Vernon, it is just a matter of time.  

Vernon is the founder of Tagcash, a $2 million paid up capital company and micropayments platform headquartered in Makati City that started in 2014, creating apps and investing in products and services that use cashless transactions. 

In a chat with DEALSTREETASIA, Vernon shared he is determined to promote a cashless economy in the country and detailed the steps he is taking to achieve his goals.

“Over the last three years, my initial ideas have moved on to promote the cashless economy in the Philippines, something I know will have a huge impact on improving efficiency, cutting down corruption and introduce new business models as well,” Vernon said.

Vernon hails from the United Kingdom and also owns three other companies, the Virtual Training Company Inc (VTC), Zeresoft Software Development and Services, and Miskio, an android app that features chat, dating, shopping, services and rewards with a fully integrated wallet from Tagcash.

He founded VTC in Silicon Valley in 1996 as a training CD publisher, and started online delivery in 1997. The company is now based in Virginia USA, with satellite offices in Australia, South Africa, UK, France and India. Zeresoft is a premier Philippine outsourcing company that started in 2012 which focuses on IT and web development, social media marketing and support services. Edited Excerpts. 

Take us to your startup’s journey.

After six years sailing around the world, I moved to the Philippines and started investing in property, and setting up a small office as an incubator for my own projects in IT. One of the these involved giving monetary rewards for sharing adverts and I needed a way of doing that, but there were no online APIs (application program interface) for Gcash or SmartMoney, the two companies that handle eWallets here. So we had no choice but to make our own system and that is now Tagcash.

Also Read: Philippines’ iWantSeats secures seed funding, to boost online bus booking biz

What does Tagcash exactly do?

Tagcash enables users to add money to an ewallet via banks, 7-Eleven and other partners and then spend it with merchants on the Tagcash platform, or transfer to each other. Tagcash also handles closed loop currencies for any merchant to create their own currency for transactions or rewards, and this can be used online or offline using stored value on NFC cards or wristbands. Anyone can also send money or pay via SMS as well which is pretty useful given the poor state of the internet in the Philippines.

How is Tagcash funded? Or do you plan to raise funds?

I am my own investor and the only one, with no real plans to raise more money yet. Creating products and services here in Philippines is much cheaper than USA or Europe, and the regulations here allow us to experiment a little more freely with new models – I also prefer to grow organically and let the products we make prove themselves. Throwing massive amounts of money to compete with the likes of Globe, and Smart, or Beep will just be a waste anyway. They will always have more money.

Are you looking to invest in other startups this year? What types of startups are you looking for and why?

I am always looking to seed invest in either our own startups or others that can spread the use of digital cash more effectively, or can use the extensive Tagcash API. One of my startups is an app called Miskio that integrates Tagcash Payments & Rewards with a lot of services for users and merchants, and I am looking for partnerships that can be leveraged in that app, such as booking type services, general ecommerce, ticketing, crowdlending/funding, logistics etc. I am also interested in any kind of business that would promote micro transactions down to fractions of a cent or peso, something the Tagcash system handles very well.

Also Read: Philippines: Kakao’s KVG backs fintech startup Satoshi Citadel

How do you compare Tagcash to other fintech companies especially in the Philippines?

I think our biggest advantage lies in the open API and clear and simple fee structure. We are also very quick to add to or tweak the API for customers. When the market is ready, we also have the SMS payment structure that works very similar to mPesa in Kenya, or BKash in Bangladesh. It’s amazing that the Philippines is still way behind in electronic payments and the replacement of cash, but I realise that there must be a need to use a system that is more effective and useful than cash. The goal will be to create new business models based on our API and services that can make that happen, either by building them ourselves or investing in others.

How is your business traction so far? What are your targets for this year?

We tend not to have targets, we grow organically. The payments business takes a while to build trust. We are seeing the results of marketing over the last year and we are having a lot more enquiries from merchants. As we build, and invest in different products, we will see even more growth.

Also Read: Exclusive: Ayannah raising $3m financing, ropes in 500 Startups & Life.SREDA as investors

How do you see the fintech business in the Philippines today in terms of prominence and scalability?

Until we bring in the unbanked which comprises the majority of Philippine users, I think it will be slow progress. Lack of internet in most of the country is a major problem so I see SMS payment solutions forming the backbone of Fintech here. Globe and Smart have had eWallets and SMS money transfer for 10 years now, but I still cannot buy something at a corner store Sari Sari store or at Starbucks using my Ewallet or SMS. Even Kenya is ahead of Philippines in that respect.

We have built Tagcash to be used anywhere in the world, for example we take Bitcoin as a method of funding wallets, but each country has its own regulations and navigating these is challenging – to say the least. I would prefer to partner with financial institutions that are already regulated and provide our technical solutions as a service.

How will you convince other users who are still reluctant in doing online transactions, worrying about security issues?

That just comes from usage. Friends are using it, merchants using it. It takes time to build that trust. Tagcash is a payment system which includes the eWallet. So I expect people will use it as a payment method first before adding and keeping money in a eWallet.

Also Read:

Philippines: Fintech startup Pitaca raises funding from Carillion Partners

PH venture builder Incubix Tech partners fintech startup VMoney

PH: Pawnhero secures funding from Kaikaku, 500 Startups, IMJ Investments

Philippines: PLDT unit, US-based UniTeller tie up for new remittance platform

PH startup TheKard raises $373k in funding, to expand MobKard app

Philippines: Digital marketing platform AppCard raises $20m Series B led by PLDT Capital

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.