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

There’s a cabinet reshuffling over at the Blog Herald. My fellow problogger Abe Olandres has recently stepped down as Editor of the Blog Herald, and will be exchanging positions with Tony Hung, erstwhile Assistant Editor. Abe cites personal problems that prevent him from giving the Herald more attention at this time.

My recent personal issues/problems have slowed me down tremendously. A death in the family, legal troubles and more- all have piled up on me so quickly that I have been barely able to focus on my work. So I am glad that Tony accepted this role willingly and on such short notice. I will still be around, sometimes writing, but more on the back-end of things and I will continue to help Tony run the site. There’s still so much to do around here, as you know. Amongst other things, we’re getting a few more people into the writing team.

Abe tells me that he’s already spent so much because of the legal problems that it’s taking a toll on his finances. I’m not really sure I can discuss details of the case here, but believe me–it’s really quite stupid. Here’s how Abe describes it.

I run a fairly small start-up web hosting here in the Philippines. One of our former clients runs a forum that we used to host. Several members of that forum were throwing vindictives against a their former employer. That employer sent us a demand letter thru their law firm demanding that we terminate the site or be charged with libel as well. The client moved out from us the following day. However, the employer/complainant has now filed several libel law suits against us claiming that we are the owner of the domain and the operator of the site. The site is still up and running though hosted somewhere else, the domain was also transferred away from us. Still, the complainant is alleging we should have enforced some sort of regulations or control over the content when it was still with us.

Apparently, all they wanted is money and this case is just of one of their many business gigs.

If you ask me, I’d say that’s plain harassment. But you know how it is here in the Philippines. Corruption and inefficiency can be found in many parts of government (I should know, I was with government for quite some time). And the judicial system is probably not too prepared in handling such high tech cases yet. Court cases can take years to finish and in the end having to pay lawyers’ retainers, appearance fees and other miscellany (including suhol perhaps?) will be the real killer.

In line with this, some regular readers of the Herald suggested that we help out Abe with his expenses by setting up a legal fund. After all, this is a case where online publications are involved. And this could happen to any blogger (I’ve heard of bloggers in other countries being sued because of comments that readers have posted).

We’ve set up a Xoom link where you can send in funds: https://www.xoom.com/pay/26999757 . Xoom accepts any amount from $25 to $2,500. For smaller amounts, you can send paypal to theblogherald (at) gmail (dot) com.

Mark of Splashpress Media has also given an incentive to contributing:

Let’s try this: for the first 10 x $100 contributions made via the paypal that Angelo mentioned – theblogherald (at) gmail (dot) com – you’ll get a link in “friends” for the rest of 2007. Just specify the link & text you want with the payment.

It’s like an über-discounted advertising rate. But it’s better since you get to help out someone in the process.

We should show our support for Abe, and express outrage at how people can take advantage of individuals like this. In the end, it’s not just about the money. It’s about principle.

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).

Chris Pirillo did it with his chest–his rent my chest idea seemed quite novel (probably would’ve been better if Chris were a girl ). Andrew Fischer rented out his forehead for ad space. Now Sacha Chua is tempted to sell ad space on her laptop lid, just as Stowe Boyd did with his T-shirts. Apparently, Stowe likes the idea.

There’s actually a business plan in there somewhere. People register with the company, get sent a new sticker every month that covers the lid, and take pictures to show they’ve put in on at the start and that its still there at the end of the month, and they get sent a small check. Fun!

I think it’s quite cool, too. Companies should be sure, though, to target people who frequently use their laptops in public, and not just laptop owners who usually leave their machines at home or on their desk at the office.

I think it doesn’t even have to be revenue-based, but it could be in-kind.

Hey, if someone will sponsor my coffee, snacks, WiFi connection and fare/gas every day just to get me to spend a few hours at Starbucks or Seattle’s Best, I would be all right with slapping some stickers on my V2000. I’ll be able to get some work done, get my daily caffeine fix, satisfy my sweet tooth, and probably get some extra dough.

Imagine if I spent three hours in Starbucks every day with a large “Seattle’s Best” sticker.

At any rate, revenue model or not, I think Sacha got it right that stickers on laptop lids–especially large stickers that shout out a statement–would definitely help in getting people’s attention. Who knows? You can even make friends along the way.

Want to meet interesting but don’t want to have to make the first move? Use the back of your laptop to get people to talk to you. Stickers are a great way to do that. My laptop reads “The geek shall inherit the earth.” I can’t count the smiles, chuckles, and conversations I’ve gotten out of it–and all I have to do is open my laptop!

I used to do this with my old ThinkPad, but I would probably have second thoughts about slapping on a sticker on my new Presario. Okay, it’s more than a month old. Still, the the likelihood of leaving sticky residue on my laptop lid is quite a worrisome thought. Someone should develop laptop-friendly stickers!

Hey, maybe K2 Interactive can do this, along with their regular marketing via blog ads. Or, I’ll probably work on the idea myself!

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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