racoma.com.phJ. Angelo Racoma on technology, economics, writing, problogging, and getting things done

There’s an ongoing discussion at the “SEO Philippines eGroup”:http://www.yahoogroups.com/group/seo-philippines (and quite an impassioned one, too) about the pricing of .PH domains. Having worked for dotPH, I’m aware of the issues and the arguments from all sides. Of course, with this disclosure, I also cannot just divulge any information I know of that other people might be interested in.

Still, you might find the thread over SEO Philippines a good read (membership to the e-group is required, but is as simple as sending email to seo-philippines-subscribe AT yahoogroups DOT com). Abe has also posted his response on his blog, and it’s from the perspective of his being a .PH reseller.

Also, another bit of disclosure: the company that I currently work with, “Enthropia”:http://www.enthropia.com , has also been active in advocating the “Use com . PH”:http://use.com.ph campaign. And part of this is our giving “free com . PH domains”:http://racoma.com.ph/archives/the-conditions to eligible bloggers. We do recognize the need for Filipinos to be able to carry the com.PH name with pride.

My response to the issue

Here’s my response, below.

Those of you know know me would be aware I used to work for dotPH. While I can’t divulge the exact details about the issue, I’ll share some general insights (the little that I actually do know of what’s been going on).

To tell you the truth, it’s a stalemate. Gov’t wants to take control–or even just reassign–the .PH ccTLD, but dotPH maintains that gov’t can’t just do that since they were first to be assigned registry status by ICANN. The Philippine government can’t do anything unilaterally since it’s also through ICANN that these issues have to be resolved, as it’s ICANN that assigns the administrative and technical management of the registry.

Frankly, dotPH claims ICANN will take their side on this matter. If the gov’t decides to sue, then it will take years and years for the issue to be resolved, especially given the slow pace of the legal system here and the lack of really solid electronic-commerce and IT laws (and do consider that one of the main proponents of e-commerce laws here is Joel Disini’s brother, Atty. JJ Disini–so there might be some difficulty trying to interpret the laws to gov’t's advantage. Though arguably they’re not always on the same side when it comes to IT stuff, when it comes to business they seem to be a strong team).

Perhaps as IT professionals and businesspeople, we can lobby for better dialogue between gov’t and the .PH registry, if what we want is to have more competitive pricing. Do consider that other ccTLDs around the world also still charge $35 per year. The market is different. You can sell CNO domains at $5 and still earn, because of the sheer volume; in contrast, the market for .PH is considerably smaller. Of course, there’s also the basic concept of supply and demand–if dotPH sells for lower then there will be higher demand for .PH domains. The thing here is to find the optimal price at which everyone’s a winner ( i.e., domains are priced competitively and are affordable, and the registry/registrars earn even better than with the $35 prices).

(End of quote)

A bigger issue

Other SEO Philippines members who have far better background on the matter than I have pitched in their two cents’ worth, and there seems to be bigger issues cited, particularly about the .PH namespace not being a “business” and that the registry should be treating their appointment as a trusteeship. If you’re interested in reading about this, then I suggest you head on to the “e-group message archives.”:http://tech.groups.yahoo.com/group/seo-philippines/messages

One of the benefits of blogging for advocacy is the attention one gets from the movers and shakers. My being part of the PayPal for the Philippines campaign has caught the attention of execs in the electronic payments industry, as well as business owners who are into e-commerce (either planning to start selling online, or already have ongoing e-commerce setups). In fact, whenever I attend EBs and blogger get-togethers I’m usually referred to as the PayPal guy. It’s good to be identified with something.

I had dinner–and a few beers–with the top honchos of YES Payments last night to discuss the possibility of their offering P2P e-payment facilities in the country. This is my second meeting with them, so far, and it was great that we were able to exchange ideas freely. I related the needs of the freelance/problogger/developer community in the country, and they told us about the issues that e-payment providers continually face in the line of their doing business.

It’s All About Risk!

The foremost concerns of any business doing e-payments are security and fraud. When money is involved, there is always the chance of one party defrauding another party, or one party defrauding the system itself. So there is always risk. And the issue is determining which party bears the risk, for the system to work. In some cases, it’s the seller that bears the risk. In some, it’s the operator of the e-payment facility.

Fraud can be perpetrated a number of ways.

* Buyer uses stolen card/card details. Card owner disputes. Chargeback is paid (paid back by seller). If the seller has already sent the goods, it’s his loss.
* Seller does not send the goods or goes under. Card owner disputes. Chargeback is paid by the facility. It’s the facility’s loss.
* Buyer uses legitimate card to pay for transaction. Seller sends the goods. Buyer receives the goods, but claims otherwise. Buyer files a dispute. Seller pays chargeback thru the facility. It’s the seller’s loss.

There are even more ways–don’t get any ideas from me! The point is that there are loopholes that can be exploited. So there the system has to consider the trust factor.

For the most part, dealing with the risk is a big headache to the e-payment facility because of regulatory requirements. I never realized that the banking system asks so much of these companies–there are big guarantees, there are limitations, and there are requirements for compliance with several laws, both local and international. And even the card companies like Mastercard and Visa require a lot, such as security of transactions, regular auditing and subscription costs–something in the range of $15,000 per year (or is it monthly?), which, while affordable to big companies, can be a steep amount for small players.

Social Engineering

On top of these risks, there is one difficulty faced by e-payment businesses particularly in countries like the Philippines without a strong judicial system. Fraud is not so difficult to detect. YES cites cases where fraudulent transactions were flagged, but allowed to push through so the perpetrators can be caught in the act. The problem is once the criminals were caught, the inefficient and corrupt judicial system was not capable of warranting adequate punishment.

Hence, perpetrators can expect be let go with just a slap on the wrist. I can also imagine cases where either the judges or the police personnel could be bribed.

We come back to the issue of risk. E-payment facilities may not be so keen on setting up shop here because they know the risk of fraud is high. Even worse, the risk of fraud not being properly addressed by the law is even a bigger threat. Fraud can be minimized if the legal system is good enough to be a deterrent to people planning to commit crime. But if one knows the system can be gamed, then people will go lie, cheat and steal their way to getting a fast buck.

A Problem of Circularity

So which came first? The chicken or the egg? (Sorry for using a cliché–it sucks, I know.)

I earlier made a bold claim that having good e-payment facilities here in the country–particularly PayPal–would be beneficial to the Philippine economy. However, it turns out that most players (probably PayPal included) would only be open to servicing the country if they can be mitigate or minimize the risks of fraud.

Perhaps for large players like PayPal it’s a bit easier. For small players, it could be a challenge.

Facilities for SMEs and Individuals

YES is considering opening a facility for P2P transactions for the purpose of business and commerce. While they don’t have such a system in place right now, they do have YES Payments for SMEs and YES Pinoy for remittance. None of these services can be used by individuals like myself for receiving payments for goods or services rendered, though. YES Payments works for businesses (well, this does not preclude individuals or groups of individuals from registering as a business). YES Pinoy, meanwhile works for P2P transactions between people with existing relationships–you have to prove you’re related to the person sending money, whether he/she is a family member, relative or friend.

I had been mentioning existing services that could do P2P, like Xoom, which fellow problogger Abe has been recommending, and which I’ve also been using. YES is positioning itself as a strong player in the country because of its presence and support. They actually do have an office here, and they do accept support calls. I think that’s an advantage. I actually tried calling Xoom support once thru their 1-800 number, but since they’re based in California, their office hours are quite off when calling from the Philippines.

What’s Next

If–and once–YES gets their planned P2P service up and running anytime soon, would there be people willing to be part of a test group? Just tell me, so we can make the necessary arrangements.

As for PayPal for the Philippines, it’s a continuing advocacy. PayPal may have already set up here, but it’s still very limited. We can only use the service to pay or send money online, and not receive (not even to load up the account). We’re still pushing for full functionality. If you have not yet signed up, please do so. We would also appreciate any support (such as linking to us and/or displaying our banners).

It’s been several weeks since I published PayPal: One Great Way to Improve the Philippine Economy. Quite a number of people have expressed support and interest. A few have provided their insights and inputs into the matter. Others even have dissenting opinions, or at least don’t think that having PayPal would be helpful enough.

Links to these other posts and news items are available here. Reader fedeback can be found on the comment thread.

Things haven’t been quite slow these past days. I guess everyone’s busy. But here are milestones, so far.

* We’ve registered a domain, www.paypal4ph.com and even set-up an update blog at www.paypal4ph.com/blog (thanks to my colleague “J4s0n”:http://j4s0n.com ).
* We asked uber-cool designer Ia (who also works with us at Enthropia) to create some artwork for the site.
* J4s0n is coding a cool sign-up sheet with an equally cool frontpage (Enthropia is the team behind iBox, which I think is really cool). We can probably ride on the existing signature campaign on petition spot launched last year, which has 812 signatures to date. However, I think it would be good to start fresh (and so everyone who would sign up actually knows what the issues are).
* Mainstream media update: Joey Alarilla (journalist, problogger, father, and Palanca awardee) has written about the *PayPal for the Philippines initiative on CNet Asia*. Joey also writes for Inq7.net and I do hope we make it there, too, one of these days. His fellow Inq7.net journalist Erwin Oliva has also expressed interest in the advocacy, and I do hope we get the much needed mainstream-media mileage.

Other ideas:

* We’re likely to move the advocacy site to a .com.ph domain to support the use.com.ph campaign (and since it’s for the Philippines, anyway!).

Open Source / Collaboration

Sad to say, running an advocacy is not that easy. Firstly, I’m quite rusty as an economist, and after all, being a jack-of-all-trades makes one a master of none. So I’m not your expert on tech and e-commerce either, but I do try to make the most out of what information I can digest from other sources. And one of the things I’ve been a big fan of is OpenSource.

The most important thing I learned from the Open Source movement is that collaboration is key to producing great ideas and great output. Hence, with this in mind, I think it’s best to move forward with the PayPal for the Philippines advocacy as a collaborative activity. We are already doing this, as various people are contributing to advancing the cause in their own ways. However, we need to come up with a more defined and focused output. We need to get our facts and figures straight. We need to be able to talk to the right people (and at the right time).

For one, we need to come up with a whitepaper, as Migs suggested on the original blog post. We need a more solid argument to support our cause, and to help convince the right people (i.e., those in government, the banking sector, and even eBay/PayPal management itself) and in this regard, I think collaborative work is the way to go.

So here’s what our next step would be. I’m hoping for inputs and suggestions on how we can go about with it. For now, we shall be setting up a Wiki on the advocacy page to get started on a draft whitepaper (link later). Any inputs and help (with the appropiate sources and citations needed, of course) would be much appreciated.

I’ve had it with petty bickerings in government and among politicians in this quaint little country of mine. People talk about big-time issues like constitutional change, corruption and the like, but people still seem to advance their own interests, while sacrificing the welfare of the rest of us in the process. This is why I choose to be apolitical. I’ve never voted in my entire life. Some might say I’m wasting the potentials of my vote. But what worth would that vote be if the supposed wisdom of the masses (which is the point of democracy) produces crappy leadership (and perhaps followership)?

And we know that crappy leadership causes instability in the economy, which causes us to remain poor, which causes people to have the tendency to make wrong decisions*, which causes us to choose crappy leaders.

Or at least the economist in me would say that.

*I have no bias against the poor, but I think to uplift one’s status in life, one has to think rich!

Employment, Underemployment, Unemployment

We are at 12% rate of unemployment and 20% of the workforce is underemployed.

We have a million people leaving the country each year to work overseas as nannies, caregivers and domestic helpers (most, though not all), when a lot of these people used to have knowledge-based work or at least white-collar work–as accountants, teachers, and the like–in the country. I have nothing against offering care to those who need it (hey, my kids need a nanny. Give me a buzz if you know someone!) or doing household work, which is also an honorable means to make a living. However, I just don’t feel it’s right to let one’s profession and skills atrophy just because the pay is better in nominal terms somewhere else.

They are considered modern-day heroes. They send in money from abroad in the form of remittances to their families here. They bolster our economy by contributing to the supply of foreign currency in circulation (which keeps the value of the Peso from falling, but that might be a concern for the export sector–but, alas, we digress).

But this is at the expense of family life. Imagine, mother and father leaving their kids under the care of relatives or other people just to make a decent living.

The other side of the coin is the trend of offshored businesseses coming into the country. Yes, it’s cool that foreign companies choose to outsource their transaction-based jobs here to us. There are the call centre agents, the medical transcriptionists, and the technical support people. There are also other white-collar undertakings such as accounting, software development and the like.

However, I still consider it to be unfair to the people involved, namely those who are employed in the BPO sector. My reason? It’s the companies that gain much of the benefit. Granted, they set up the infrastructure and they take on the overhead for operations. This emboldens them to take a big cut of the compensation pie. When American, British, or other European firms pay about $1,000 to $1,500 per month per call centre seat, the actual call centre agent only gets about PhP 15,000 to 20,000 (or $300 to 400) of that amount. Add to that the health issues brought about by having to work in shifts and having to change shifts every so often (which is a practice in the industry), then guess who’s on the losing end?

There must be another way.

My proposal

Here’s a simple proposal of mine.

I believe there is a good pool of talented people in the Philippines just waiting to be tapped. For instance, I write. And I know people who write really well (in fact, I’ve gone as far as hiring them to work with the company I’m involved with). I also know people who can develop great web apps and create Go Ogle worthy designs, whether on their own or under the guidance of foreign visionaries.

In fact this is what we do at Enthropia. Just one of the many things, actually. There are a handful of us here in the country (as well as in other Asian countries) working on our projects and we’re on a mobile/home-based working arrangement.

We basically render work for our North America-based mother entity (likewise a lean team) and they pay us for our services. Directly. And not having to pass through some big-ass company that will take a big chunk off our earnings.

We don’t have a glitzy office in Makati or Eastwood, nor do we plan to set one up anytime soon. We each pay for our own equipment and infrastructure. We feel this current arrangement of ours lets us be robust enough to accomplish what has to be done without all the administrative overhead.

Call it freelancing. Call it the informal sector. Call it the underground economy.

Other people probably aren’t aware of the possibility that one can work for foreign companies without passing through intermediaries (or middlemen) here, nor actually going abroad. And if they were, most of the time the hindrance would be the means by which money can be transmitted.

You can render a service and send whatever needs to be sent or done by email (or IM or SMS) but money’s a different thing altogether.

Yes, there are a handful of remittance services, but here’s the problem:

* They take a big cut
* They are not convenient

If only we had PayPal in the Philippines, then I think we would be able to open to the world better means to access to our pool of talent.

In the course of my freelance work as a writer/blogger I’ve had clients who paid via money transfer and it took days, and it was expensive. Xoom? It’s a good mid-way solution, but still not as convenient as having the real deal (PayPal). After all, they still get a cut, and the paying party still has to register for an account, where his PayPal details would then be keyed in.

There’s my simple thesis.

Having PayPal in the country would greatly benefit the following people:

* Web developers,
* Designers,
* Photographers,
* Writers,
* Pro-bloggers,

and virtually anyone else who can render services remotely while corresponding via the Internet. Their correspondents can pay simply by clicking a few buttons, and that’s it.

This would be a great opportunity for both sides, as it will open up access to the supply of good talent, and as well as open up access to those who are on the demand-side.

Who said perfect capital mobility should be impossible? In this day and age, where knowledge—or rather Knowledge with a capital K—is the foremost capital, mobility knows no geographic bounds!

However, PayPal won’t deal with us. It’s probably because we have a history of having potential for money laundering activities. Or maybe it’s because of poor security in banking or credit card transactions.

The point is that we have to lobby for inclusion as a PayPal enabled country.

If our Anti-Money Laundering Act is crappy, then we should lobby for a change for the better. If implementation is poor, then we should lobby for stricter enforcement.

Let’s work together!

I’ve had a talk with an esteemed gentleman from the country’s Liberal political family, and he’s very much interested with my idea. I know this is not an original idea of mine (the need for access to online financial transactions, namely PayPal), but probably other people haven’t brought it up to the level of actually trying to do something about it.

Here’s our chance. Let’s join forces, organize, and formalize so we can better forward our cause. I’m probably not the best person to mobilize people but I sure do have a lot of ideas.

Anyone wanna be involved in this?

Updates

Sites that link to this post, as of 2006-07-24 09:41H (darn trackbacks/pingbacks aren’t working).

* Crimson Crux (Phillip Kimpo)
* Pinoytechblog (c/o Arnold Gamboa)
* Random Takes (Migs Paraz)
* The Mike Abundo Effect (okay, Mike, is there really such a thing as a Mike Abundo Effect?)
* Snow World
* TechnoPinoy (Mon Abasolo)
* Captain’s Log (Jepoy Bengero)
* Alleba Blog (Andrew dela Serna)
* Touched by an Angel (Noemi Lardizabal-Dado)
* Bubbleheadnut’s Livejournal
* Bitstop Network Services blog
* Wonderful World of Jonas
* Yugatech: PayPal in the Philippines via Xoom (Abe Olandres)
* Babelmachine: Bloggers lobby for PayPal in the Philippines (Joey Alarilla)
* Planet Pinoy Biz & Jozzua. com (both by Jozzua)
* TechnoPinoy, again (Mon would rather not have PayPal )

In mainstream media (papers, blogs, etc.)

* CNet Asia: Bloggers lobby for PayPal in the Philippines (by Joey Alarilla)

Posted elsewhere:

* DIGG this story!
* ForeverGeek

*Update, 2006-07-20 1500H*: We’re setting up an advocacy site, www.paypal4ph.com. Right now, the site redirects to this blog post until we come up with something better. Credits to Jason for setting up the domain and hosting. Ia will be doing the logo, and Phillip would be helping me out with the writeups (the blurbs, taglines, etc.). I hope to be able to come up with a whitepaper of sorts, as Migs suggested in a comment below.

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