This article first appeared in The Edge Financial Daily, on July 12, 2016.

KUALA LUMPUR: Payment service provider GHL Systems Bhd has teamed up with Rizal Commercial Banking Corp (RCBC), a leading bank in the Philippines, to provide e-payment services to merchants in the Philippines for credit-card transactions.

In a statement yesterday, GHL Systems said its wholly-owned subsidiary GHL Systems Philippines Inc (GHL Philippines) had signed an agreement to provide transaction payment acquisition services to RCBC through its servicing entity RCBC Bankard Services Corp.

This new service will enable GHL Philippines to directly contract with merchants to provide credit-card payment services with RCBC acting as the underlying bank that will obtain authorisation for the credit-card transactions.

GHL Systems group chief executive officer Kanagaraj Lorenz views transaction payment acquisition partnership as a game changer.

“There will be many, many more small merchants who will be accepting card payments in this country,” he said in the statement.

“The Philippines is an important market for GHL Group and we are thrilled to partner with RCBC as the acquiring bank on this transaction payment acquisition initiative. RCBC Bankard is one of the pioneers of the credit card industry in the Philippines and is well-respected by the business community here,” Kanagaraj added.

Since its soft launch in mid-May 2016 to date, GHL Philippines has contracted with 1,000 merchants for the transaction payment acquisition service. These merchants come from a diverse range of business segments including consumer retail, food and beverage, and services such as lodging, medical, dental and beauty outlets.

Both GHL Philippines and RCBC said they are poised to take a “significant market share” of the small- and medium-sized merchants acquiring business in the Philippines.

“The Philippines with its 102 million population holds great potential for debit- and credit-card payments growth. There are presently only an estimated 180,000 EDC (electronic draft capture) and PoS (point-of-sale) terminals servicing an estimated 10 million credit cards, and 25 million debit cards issued to consumers,” they said.

Last month, Kanagaraj was reported as saying that GHL Systems expects its earnings in the current financial year ending Dec 31, 2016 (FY16) to be stronger than the previous year on the back of stronger transaction payment acquisition and web payment service growth.

In FY15, GHL Systems posted a 58% year-on-year jump in net profit to RM10.34 million, while revenue rose 28% to RM211.38 million, driven by better performance across all segments including transaction payment acquisition. The Philippine market accounted for 12% of its revenue in FY15.