Japanese epayment giant sinks series A funding into Philippines’ Dragonpay

Yet another Japanese web company cast a big vote of confidence in Southeast Asia today as GMO Internet Group ploughed series A funding into Dragonpay, a Philippine startup that’s trying to make it easier for people to pay for things online.

The Japanese firm runs GMO Payment Gateway, so it can lend some expertise to its latest investment. The cash comes from the GMO Global Payment Fund, but the amount isn’t disclosed.

Ecommerce is still at a fairly early and formative stage in the Philippines and epayments are a major issue.

“We have always believed that in order for ecommerce to grow in a developing country like the Philippines, there has to be more accessible payment options to the masses because credit card and banking penetration is just too low to make it happen,” points out Robertson Chiang, Dragonpay’s co-founder and COO/CTO.

Ryu Muramatsu, a founding partner at GMO Venture Partners, adds: “In the Philippines, 80 percent of the total population don’t possess a bank account and these people need to pay and buy everything offline.”

That’s why Dragonpay focuses on prepaid cards, available at over 10,000 stores – such as supermarkets or gas stations – that can then be used for shopping online. It makes epayment as easy as mobile top-ups.

People can use their Dragonpay credit at major ecommerce sites such as Metrodeal, CashCashPinoy, and Ensogo, with local telcos Globe and Smart, on Facebook and MOL, and on a variety of other useful sites in the country,

Chiang tells Tech in Asia that the service has 700,000 users in the country at present.

Startups rushing to epayments

Dragonpay is one of many startups across Southeast Asia that are trying to solve the multifarious online payment problems across the region. One of the largest is Thailand-based 2C2P, which has also expanded to the Philippines. GMO has also backed 2C2P.

The World Startup Report last year weighed up the startup landscape in the Philippines and judged that it has great potential, but has a number of infrastructural issues (aside from the challenge of epayments), such as a lack of funding from domestic investors. Growing interest from powerhouse neighbors, such as Japan or Singapore, could help make up for that shortfall and power-up the country’s startups. The same goes for other emerging markets across Southeast Asia.

Chiang foresees big growth in ecommerce in the country as more people go online:

The general ecommerce retail industry is projected at around 15 to 20 percent growth. But I foresee a big spike coming in through the efforts of the Philippines government to go online. We are bracing ourselves for a more than 10-fold increase from now to next year.