The government warned against illegal fintech entrepreneurs

PUBLIC agencies need to double down on due diligence on potential public financial technology (fintech) entrepreneurs, especially now that the industry is booming, a former lawmaker has warned.

In a statement on Wednesday, former Pwersa ng Bayanihang Atleta Partylist Representative Jericho Nograles warned public agencies to only deal with credible entities that provide good and secure solutions and have clean track records.

He urged line departments and their sub-agencies to double down on conducting due diligence on potential contractors and partners to ensure that Filipinos are not left out, while strengthening digital transformation efforts.

By fully supporting the goal of President Ferdinand “Bongbong” Marcos Jr. on transforming the Philippines into a more digital nation, Nograles said a whole-of-government approach must be adopted to ensure that digital services are not only safe and secure, but also convenient and affordable for many Filipinos.

“The government must ensure that the contractors and partners it brings in are credible and have a clean track record that proves their ability to bring essential and critical public services closer to Filipinos,” Nograles said.

He noted that he was wary of agencies that outsource digital transaction services to fintech players and digital banks, as they have financial implications and involve personal data.

“The government must adapt to the demands of the new normal, but it must also be careful in choosing its fintech partners. While there are many credible players in the Philippines, there are also those who have proven that they are out to overcharge consumers for personal gain,” Nograles said.

To recall, the Bureau of Quarantine (BoQ) contracted PisoPay in 2021 to assist the bureau in issuing the International Certificate of Vaccination, or the “yellow card,” which was a requirement for outgoing overseas Filipino workers.

Filipinos applying for yellow cards must pay P370 for a copy, of which P70 goes to PisoPay, a service fee considered irregular as other government agencies only charge P30.

During congressional inquiries, it was revealed that PisoPay did not go through the required tender process and that PisoPay’s net financial capacity was not able to enter into contracts with the government. This led BoQ to drop the contract with PisoPay.

“The PisoPay-BoQ fiasco was a disservice to the Filipino people. We should not let this happen again, which is why I urge government agencies to be more careful,” Nograles said.