August 8, 2019 – Cebuana Lhuillier taking a stake in blockchain and fintech startup SCI last June is a sign of change for both companies when it comes to how they plan to forge their future ahead together. The partnership will signal SCI playing a role in their digital transformation while also potentially helping the trusted remittance outlet to explore blockchain and cryptocurrency. One low hanging fruit is enabling the use of blockchain-powered transactions or financial services via Cebuana outlets across the Philippines.
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Last Mile Powerhouse Cebuana Lhuillier
In remittance transactions, the last mile refers to that outlet where a customer can finally withdraw the cash sent to them by someone, probably from abroad or the metro. In the local setting, we sometimes refer to pawnshops and money changers as the last mile outlets. The largest of them all is Cebuana Lhuillier.
With over 2,500 branches in the Philippines, Cebuana Lhuillier is in front of more than 70% of the country’s unbanked population. Recognizing digital transformation as its next big priority, Cebuana’s parent company P.J Lhuillier is aware of the trend where fintech companies partner with brick and mortar remittance outlets to create a digital presence or update their old processes with the times.
SCI Stake Acquisition
Because of that, P.J Lhuillier acquired a stake in SCI Ventures (Satoshi Citadel Industries) in order to kickstart this digital transformation. SCI will be a key piece in a multi-pronged approach to introduce cutting-edge financial technology to Cebuana Lhuillier’s 4,000 domestic partners and one million combined physical and virtual touchpoints worldwide.
SCI Ventures and Blockchain
SCI, a pioneer Bitcoin and blockchain company in the Philippines is at the forefront of the rising demand for cryptocurrency and other digital assets. As one of the few companies in the Philippines with a virtual currency license, it is legally allowed by the government to facilitate crypto to fiat transactions and vice versa. Data from the country’s Central Bank, the Bangko Sentral ng Pilipinas (BSP) has revealed that virtual currency transactions have doubled in 2018. If we looked further, data from 2017 also revealed increased crypto transactions in the Philippines vs the previous years. This data came from reports submitted by virtual currency-licensed companies like SCI Ventures.
Low Hanging Fruit
SCI Co-founder Miguel Cuneta welcomed the partnership with the giant financial service provider as a step forward for both companies. “We hopefully will be able to play a role in Cebuana’s move into the digital fintech world, and maybe even explore potential use cases for blockchain technology and cryptocurrency in the future,” he said in our exclusive interview.
One low hanging fruit, he said, is enabling the use of blockchain-powered transactions or financial services via Cebuana outlets. This is significant because, currently, Cebuana Lhuillier has 11 million active users in their loyalty card program and serves over 25 million Filipinos around the world.
“They basically have the audience already onboarded. Cebuana is one of the most trusted brands in the country, and since trust is a major consideration as to why Filipinos would use a financial service, they already have that advantage going for them.”- Miguel Cuneta, Co-founder, SCI Ventures
Cebuana Lhuillier President and CEO Jean Henri Lhuillier said:
“This is another milestone in our continuing pursuit to expand our horizon and make a significant impact as we enter the digital arena. With our robust 2,500 branch network and strong partnerships with key financial players such as SCI in place, we are ready to take advantage of our unique ‘bricktech’ set-up and make our mark”
One Step Towards Blockchain and Crypto Awareness
With the country being one of the biggest recipients of remittances from around the world, Cebuana Lhuillier can benefit from using blockchain as a way to move money. Apart from transfer speed, what’s important here is the cost efficiency because with blockchain, there is no need to trust more middlemen companies and will allow more partners that can make use of Cebuana as a cashout partner.
SCI Ventures is not just doing business remitting money through blockchain. For many years, it has been a thought leader in the blockchain and crypto space in the Philippines, spreading the tech’s advantages and usecases through meetups, seminars, and even conferences, government, universities, and private offices where they are often invited to talk more about this disruptive technology. The partnership will potentially allow SCI to have a more hands-on approach in Cebuana’s transformation and will make them more aware for the possible use cases of blockchain and cryptocurrency. As mentioned, Cebuana Lhuillier is the biggest non-bank financial institution in the Philippines. Turning them into blockchain can make haste of one of SCI’s vision – to use fintech and blockchain technology to provide accessible financial services for everyone.
This article is first published on BitPinas: Why the Biggest Microfinance Institution in the Philippines is Investing in Blockchain Startup SCI Ventures