Financial services app MarCoPay is winning over Filipino sailors as a convenient means to receive salaries and a widening array of financial services on the sea, and attracting international attention as a result.
Traditionally, sailors have been paid in cash. This is cumbersome because seafarers can be confined to the same vessel for several months to as long as a year except for usually brief shore leaves.
MarCoPay operates a platform that provides a range of financial services for Philippine sailors through a smartphone app, including an e-money wage payment, money transmission services, and applications for loans. A growing number of Filipino ship crewmen are turning to the platform to seek housing and automobile loans.
“We would like to thank [MarCoPay] for giving us the opportunity to build our own dream house.” Frederick Cacnio, the 37-year-old captain of a commercial ship, told Nikkei. He has seen a drastic change in the way he builds and manages his assets thanks to MarCoPay, which has enabled him to obtain a mortgage to build his own house. “To be honest, we were quite hesitant at first to apply for a housing loan due to the pandemic situation, and as an OFW [Overseas Filipino Worker], it was quite difficult to apply at that time in some banks,” he added.
MarCoPay was founded in Manila in 2019 as a 50-50 joint venture between Philippine logistics giant Transnational Diversified Group and Japanese marine transporter Nippon Yusen. The Philippines is known as the largest supplier of merchant ship crew in the world. Filipinos account for some 70% of crew members of the ships operated by the Nippon Yusen group.
Japanese trading house Marubeni purchased a stake in the startup in June 2019 and MUFG Bank, the banking unit of Mitsubishi UFJ Financial Group, also invested in the company, in March 2022.
Marubeni is planning to link its healthcare and telecommunications services to MarCoPay’s platform, while MUFG Bank, which operates banking services in the Philippines, sees the platform as a potential springboard for expanding its presence in the Southeast Asian country’s financial services sector.
“We hope to free crew members from unnecessary problems,” said MarCoPay president Toshiaki Fujioka, a former Nippon Yusen executive.
MarCoPay started its business by rolling out an e-money wage payment service, with full-scale operations launched in August 2021. More than 15 ship operators now use the app to pay monthly salaries to around 10,000 crew members.
Crew members usually receive several months’ worth of wages in lump sums at a port of arrival. Merchant ships worldwide carry a total of some USD 590 million in cash at any given time. Ship operators face the costs of wiring the money overseas and safeguarding the copious amount of cash delivered to ports.
MarCoPay’s electronic payment service allows seafarers to receive their salaries every month and spares them the trouble of keeping large sums of cash aboard a ship.
As sailors wire their salaries to accounts at more than ten affiliated banking institutions, including BDO Unibank and Bank of the Philippine Islands, their families can receive cash at these banks or even at certain pawnshops. They can also receive the money through such popular e-payment systems as GCash and GrabPay mobile wallets.
For security reasons, MarCoPay’s app can be downloaded to only one device. The app is designed to be simple to use for sailors who usually work in a poor communications environment. The platform uses batch processing—the processing of transactions in a group, or batch—for higher efficiency.
Earl Senerez, a crew member who uses MarCoPay, says the app allows him to transfer and receive money safely.
In 2021, there were about 1.56 million merchant ship crew members around the world, with Filipinos accounting for the largest chunk of 220,000 or around 15% of the total, according to Drewry, a British maritime research consultancy.
In the Philippines, sailors are among the highest-paid workers. Captains earn USD 8,000 per month. The total of salaries paid annually to Filipino crew members is estimated to be USD 7.4 billion.
MarCoPay has opened up new opportunities for highly-paid seafarers to use financial services. In cooperation with BPI, the platform lets sailors apply for auto, bike, and home loans at preferential interest rates.
Cacnio had no experience in using such financial services until he started applying for a housing loan through the app. He says the new experience has made him aware of how owning a house does not simply mean falling into debt but is vital for having a feeling of affluence and financial security.
MarCoPay’s strategic focus is on expanding its portfolio of services, especially those related to asset building for sailors. In addition to providing loans and selling health insurance policies, the company also plans to offer mutual fund products, education savings accounts, and financial support for sailors seeking to start side businesses.
It will also issue prepaid cards for shopping during shore leaves. Developing a financial platform designed exclusively for sailors may appear to be a niche business. But it gives MarCoPay an entrenched and unchallenged position in the highly competitive e-money market.
MarCoPay is planning to embark on expanding its operations into other Southeast Asian nations with a large population of seafarers like Myanmar in 2023.