By ALECKS P. PABICO

www.pcij.org

Lifestyle portal Yehey! even launched its initial e-commerce service, PayPlus+, in 2001 in partnership with BancNet, and later with MegaLink. Payplus+, explains Yehey! e-commerce manager Jonas de los Reyes, was a payment solution in consideration of the 18 million Filipinos who have ATM cards as compared to about six million who own credit cards. Last year, it was rebranded as Kaban, a one-stop payment solution enabling online entrepreneurs to accept payments through ATM, credit card, and e-cash.

Kaban has since become the payment system of choice of 13 online merchants, offering a diverse array of products and services from pastries (Goldilucks with its Padala Program) to shoes (Melissa Philippines), to training for call-center applicants (Powers Inc.). Medicard Philippines, a health-maintenance organization, allows membership applications online via Kaban. So does Outbound Asia, a staging and multimedia production house, for online registration for the events it manages. SMEs like Qube PC, a Quezon City computer shop, also provide Kaban in its menu of payment options.

OF COURSE, there have been systems developed for users of credit cards - which is, after all, the universal payment mode for e-transactions. Among the local crop are Union Bank's The Port, Mozcom's PayEasy, and Equitable-PCI Bank's Equitable Card Network. Other regional and global third-party providers now servicing online merchants locally are AsiaPay, CCNow, Website Wizard, YesPayments, Your One Stop Shopping Network (YOSSN), Payment Processing Corporation, and Asia Pacific E-Serv Corporation.

But it's still a relatively tiny market, says ex-banker Mary Anne Tolentino, board chairman of the Philippine Internet Commerce Society, a nonprofit group of small entrepreneurs and big corporations. She adds that the state of the country's credit infrastructure is a major problem.

"To do business internationally," she also says, "you need a credit card. But the market of credit-card companies in the Philippines are people who are employed, not SMEs." For the credit card-holder base to expand, Tolentino says a centralized credit bureau like those in the United States, Europe, and Singapore should be set up. This would gather consumer-credit information from banks, credit-card companies, and government lending institutions. Without reliable credit information, financial institutions have been hesitant to extend credit to small borrowers like SMEs. (Such a centralized credit information system is the subject of a proposed bill authored by Senator Edgardo Angara.)

All these mean that significant amounts of investment are needed to get into e-commerce. As Toral writes in her website, a "fully blown e-commerce website with a full blown e-payment, staffing, marketing tools, logistics program, and risk management in place can easily cost $20,000 as first-year investment."

This, she adds, is on top of back-end software applications like spreadsheet programs for their accounting, sales, and resource planning needs. But Toral says e-financing programs are now available to facilitate participation of SMEs in e-commerce. The Department of Trade and Industry's SME-FIT program, for one, provides credit lines to accredited IT companies for use in financing hardware, software, website, and customized application development to be made available to SMEs in easy payment terms.

SMEs wanting to ride the e-commerce train would also do well to take heed of the learning curve that the likes of Island Rose and Divisoria.com have gone through. For Divisoria.com's Romano, there's a better chance of success for those who can offer any or all of the following: convenience, availability, and price.

"In terms of convenience, Cebu Pacific made headway by offering an online ticketing system," he says. "As for availability, why do Filipinos shop with Amazon even with the added cost of shipping? Because they offer books that are not available locally."

As for price, the 42-year-old marketer cites the case of local professional photographers who shop in Ebay or B&H Photo because the items there are still much cheaper even with added shipping charges.

But Romano also stresses the importance of advertising and promotions, since potential clients should first know that a particular website exists, and how to access it. When he launched Divisoria.com, Romano made sure he had advertising support in the form of a banner ad on Inquirer.net, which, he says, remains the "most cost-efficient and fastest medium to generate awareness (about products and services) among overseas Filipinos."

Island Rose's Andaya, for his part, believes that having a solid business model, a clear value proposition, and good customer service can only help an online business thrive. "To make e-commerce viable," he says, "all we need is more entrepreneurial spirit. We already have everything we need."

Such entrepreneurial drive is actually at play in many personal sites and blogs hosted in social networking services as Multiply where users are selling and buying items among their network of contacts. Yehey!'s de los Reyes says this the beauty of the Internet at work - and proof that anyone, however small, can go head to head with big companies online. He even says individual entrepreneurs and SMEs have an edge because they can easily adapt to new technologies. There's also no big capital needed, unlike having an actual store. "The secret," says de los Reyes, "is in finding a niche, a product that is not competing with another store or brand."

Romano can only agree. He says the best tasting sans rival, the famous siomai along McKinley - products people hear only by word-of-mouth - can now be widely distributed through the Net. His site, he shares, gets frequent requests for the most peculiar of Pinoy items like a kudkuran ng niyog (traditional coconut grater), panghulma ng polvoron (mold for powdered milk candy), and a local brand of women's underwear.

But security is still an issue, especially if one's online store is targeting overseas clients. In 2003, fraudulent credit-card transactions by members of a Filipino community website were uncovered after the access point was traced to an Internet service provider in the Philippines. This led to the arrest and filing of cases against three individuals.

That is why among Toral's to-do list include batting for an efficient cybercrime program. This entails providing law enforcement agencies with a regular allocation in their budgets so these could help citizens and merchants in combating fraud and cybercrime.

For Tolentino though, security is not a major stumbling block. "Yes, you need more secure tools, and laws, but even without those, people were not discouraged from engaging in e-commerce."

She says what is key is educating everyone about e-commerce. And it surely won't just be about security measures, but on the whole issue of conducting business online.