Digital payments startup Ayannah diving deep into Big Data

The Philippines-based startup says it can help businesses understand and grow their customer base through Big Data analytics

By Yon Heong Tung

Fintech startups for the unbanked are seeing a boom in Asia, with 490 million in the region still lacking a bank account.

Fintech services like Indonesia’s Coda Payments and Vietnam’s 1Pay tackles this pain-point by letting users pay for bills and services via SMS, cash at convenience stores or prepaid cards.

In the Philippines, digital commerce and payment startup Ayannah offers a host of digital financial services that focus on serving the needs of the 100 million resident Filipinos as well as the 12 million overseas Filipinos around the world.

Ayannah has launched and operates two main platforms – Sendah and Sendah Direct.

Sendah is a B2C platform that allows overseas Filipinos to send mobile top-ups, electronic vouchers as well as physical goods. Sendah Direct is a Software-as-a Service (SaaS) platform that partners with brick-and-mortar retailers to offer services like mobile top-ups, online game credits and, more recently, domestic remittance.

It partnered up with PLDT/Smart, the Philippines’ largest mobile network operator, and launched Smart Money Acceptance (SMA) allowing Sendah Direct agents to accept Smart Money top-ups for pay-out at other Smart Money payout agents.

In the near future, Sendah Direct will also enable Smart Money Encashment (SME) which will allow Sendah Direct agents to pay out Smart Money to beneficiaries.

More financial services will also be enabled on Sendah Direct, including microinsurance, bills payment, plane ticketing and even Bitcoin purchase and sales.

Recently, Ayannah also launched Sendah Remit, a bank-grade SaaS that will allow domestic cash remittance or ‘Cash Pick Up Anywhere’ as well as remittance into any domestic bank account.

Sendah Remit is partnering with traditional remittance companies such as Western Union, MoneyGram and Transfast, new online remittance companies such as Xoom and World Remit, emerging Bitcoin-based remittance companies such as Abra, Coins.PH and Rebit.PH and leading domestic remittance companies such as Cebuana Lhuillier, LBC and Tambunting, with a grand plan to build the largest digital payment network in the Philippines.

Ayannah expects to have 9,000 agents onboard both the Sendah Direct and Sendah Remit networks by the end of 2015.

With Sendah Direct and Sendah Remit, Ayannah aims to help solve the ‘last mile’ problem of cash remittances and make remittances more accessible and affordable to the large portion of the population that relies heavily on cash remittances.

Big Data analytics: The next big thing

While these services put Ayannah in a good position to grab a sizeable portion of the e-payments pie, it may still face stiff competition from other emerging e-payment providers.

As Ayannah is working hard to fortify its leadership position in the Philippines, how can it expand in the region and across the world?

The answer is Big Data analytics.

The global appetite for Big Data is steadily growing and businesses are clamouring for more in-depth information about their customers to help fine-tune their business model. By 2017, total big data revenue is expected to hit US$50.1 billion, up from just US$7.3 billion in 2011.

With its plethora of e-payment services and large customer base – more than one milion repeat customers, Ayannah is well-positioned to leverage the enormous payment data it is accumulating to provide value-added digital financial services such as identity verification, credit scoring and lead generation.

“Payment services can be very idiosyncratic; each country has their own payment infrastructure and payment problems. In each of those countries, there is probably [something]  like Ayannah that is focussed on solving those payment problems. What we can bring to the table is analytics,” says Mikko Perez, Founder and CEO of Ayannah, in an interview with e27.

Its first Big Data initiative is called Project PIGLET. Ayannah is utilising “recently declassified Big Data analytics and machine learning technologies used by the CIA and NSA” to profile the large unbanked population in the Philippines and develop the very first risk-based credit scoring system in the Philippines.

“Take, for example, a Filipino maid in Singapore. Her employer pays her cash and so she goes to Lucky Plaza (a shopping mall) to remit money twice a month. She has been doing this for 10 years religiously, but she does not have a bank account. So if you are using traditional credit scoring rules, she may not even be eligible for a credit card. But since we can measure how conscientious she is because we see the frequency and consistency of her remittance transactions, we could assign her a higher score as a possible candidate for additional credit or access to financial services like insurance or savings products,” explains Perez.

Currently, Ayannah possesses over a half a billion payment records to profile customers for financial services such as SME loans, insurance eligibility, car and mortgage loans.

These profiles are then created by cross-referencing customers’ payment data with their top-up data, remittance data and social media data.

“We want to target insurance companies, property developers or anyone looking for new customers who do not have access to this broad segment of the emerging middle class that may not have a complete credit history or hard assets to qualify for a loan. The next billion customers basically,” says Perez.

Ayannah’s other Big Data initiative – Project COMPASS – will combine offline and online analytics to build an omni-channel predictive and prescriptive analytics network to increase traffic and conversion for retailers.

According to Perez, the initial trials in Singapore and the Philippines have been very encouraging.  Through monitoring and analysing the in-store behaviour of offline customers, Ayannah was able to gain actionable insights that help retailers stock better and engage their customers to increase conversions and sales velocity.

This new data source of offline and in-store customer behaviour is even interesting for the Internet Unicorns such as Google and Facebook as they both race to understand the behaviour of the next billion consumers in emerging markets who continue to shop in brick-and-mortar retail stores,” explains Perez.

“In the next few weeks, we will announce the launch of retail analytics innovation centres in Singapore and the Philippines and partnership with some very large publicly-listed retailers as well as leading Silicon Valley data science companies. We believe that the data analytics service we will deploy soon will be relevant not just in Southeast Asia but also in the rest of the world,” he adds.

Future of Ayannah

Ayannah plans to publicly list its Sendah platform in the Philippines in 2017. It is, however, leaving out its data analytics offshoot for a separate liquidity event in the future.

It is also working with other startups to roll out a scholarship programme by next year so that it can hire more software developers and data scientists from the Philippines’ leading universities.

In the next two years, Ayannah aims to grow the largest digital payment network in the Philippines and achieve a 15 per cent market share of the domestic remittance market in the Philippines.

It also plans to launch its services in Singapore, South Asia, Southeast Asia and the US.

“You will be surprised as to the size of the underbanked and unbanked segment in the United States,” says Perez.

Its long-term goals, however, is to extend its services to the next billion consumers who comprise the emerging middle class, most of whom are in emerging markets.

“Emerging markets are the last frontier of global brands,” says Perez. “As global brands reach market saturation in OECD countries, they will have to rely increasingly on emerging markets to sustain their growth and maintain the value of their stock.”

To achieve this, Ayannah will be seeking funds to accelerate its marketing efforts to acquire more agents and customers, enhance its existing platforms, build new products and expand around the world.

“Launching digital financial services is not for the faint of heart. We have to deal with a myriad of challenges – poor Internet connectivity, slow adoption of smartphones, antiquated regulatory frameworks to name a few,” says Perez.

“But we are proud of what we have achieved in a few short years with the limited capital that we have. We are confident that with the launch of our Big Data analytics services, we will have the full stack of digital financial services focussed on the emerging middle class and we can look forward to several years of rapid growth not just in the Philippines but in many emerging markets,” he concludes.

Disclaimer: This article has been written in collaboration with Ayannah.