Serious due diligence by Fintech entrepreneurs is required
Former Congressman Jericho Nograles is urging this administration to conduct serious due diligence on its fintech entrepreneurs during the current fintech boom and rush to digitize.
In November 2021, Nograles led the Congressional investigation into the irregular contract between the Bureau of Quarantine and PisoPay, a fintech startup that offers remittances and money transfers. BOQ contracted PisoPay to assist in the issuance of its International Certificate of Vaccination (ICV), commonly known as the “Yellow Card,” a requirement for outbound Overseas Filipino Workers (OFWs). Filipinos applying for yellow cards paid P370 for a copy, of which P70 went to PisoPay. This P70 service fee was challenged and later deemed irregular because other government agencies charge a lower fee of P30.
During the series of congressional inquiries, Nograles and other lawmakers discovered that PisoPay did not go through the required bidding process. PisoPay’s net financial capacity was also insufficient and was not eligible to enter into contracts with the authorities. As a result, BOQ terminated the contract with PisoPay.
But again, we heard that the same arrangements may soon happen and be repeated in other public agencies that want accelerated digital transformation. I would advise them to heed Nograles’ clear warning.
“The PisoPay-BOQ fiasco was a disservice to the Filipino people,” . “We should not let this happen again,” he repeated. “The accelerated digital transformation requires governments to be more careful in conducting due diligence on their potential partners,” to ensure that all contractors and partners are credible and have a clean track record. These digital transaction services have financial implications apart from involving personal, private data about people.
In the past, these fintech companies and line agencies have bypassed procurement processes and charged high prices to consumers. This must stop. I agree with Nograles when he said that there are many credible fintech players today, but there are also those that have been shown to overcharge consumers for personal gain.
Monitus es!
In Latin, this means you have been warned.
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