Payo, ‘New Kid’ in PH FinTech Town, Opens to Change Game of COD

Online commerce across the globe, including in the Philippines, is rising, with a big number relying on cash-on-delivery (COD) transactions. A “new kid” in fintech town — Payo Payment Solutions (Payo) — is taking advantage of this development in the digital era as it opened in the Philippines. “Fintech” stands for financial technology.

During the new fintech platform’s launch in Makati City recently, Ofri Kadosh, Payo co-founder and CEO, discussed the world COD markets, as he cited that 50 percent of the global population (seven billion in 2011 based on United Nations figure) is “unbanked.” Meanwhile, Kadosh said they put in $0.5 million seed money when they developed Payo in 2017 and plans to invest more to cover the hiring of new employees and further develop more services.

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The Philippines, he said, “is our first market in Asia, the most interesting market in Southeast Asia when it comes to e-commerce, the most growing market. We are here to change the game.” Among the countries, he named for the year 2017 included Brazil, which registered US$18.7 billion e-commerce deals, 57 percent COD, and India with $14.5 billion, 79 percent COD.

In the Association of Southeast Asian Nations (ASEAN), Indonesia had $7 billion, 66 percent COD; Thailand, $2.5billon, 79 percent COD; Vietnam, $2.2 billion, 75 percent COD; Philippines, $1.6 billion, 93 percent COD; and Malaysia, $1.2 billion, 80 percent COD.

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Of the seven countries cited by Kadosh, the Philippines had the highest COD transactions in terms of COD, though only sixth in the amount of digital commerce. Payo expects the figure for the Philippines to rise at $5.5 billion by 2020.

Now consider that of the estimated 107 million Filipinos, more than half are active Internet users at 69 million, a staggering growth of 556 percent in just five years compared to 12 million users in 2012. He said Filipinos also conduct 200,000 e-commerce deals per day.

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The figures were not lost on Payo, of course, as the new player seeks a bite on the country’s digital business pie and offer its COD platform. Kadosh showed more figures, such as 93 percent of Filipinos are partial on COD in their online purchase; that 72 percent of Filipinos have no bank accounts; and, that only 8 percent carry a credit card.

Payo chose the Philippines as its first country of operation as it sees good business moving forward, at the same time realizing that COD transactions have challenges to overcome, particularly for small retailers because logistics firms do not do business with them. One of Payo’s first step then is to partner with logistics providers to empower merchants in their COD e-commerce.

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Kadosh said they struck a partnership with courier service providers such as 2Go, LBC, Paynamics, Black Arrow Express, Honest Bee, Ninja Van, Lalamove, Delasia, and Zoom to cater to small merchants.

Among the challenges that Payo identified and wanted to address were high cancellation of purchases at 30-35 percent; consumers have no credit history; conflicts of interests with delivery companies which charge an average of $3.5per delivery and double the fee when the transaction is cancelled; and unstable cash flow management where remittance to the seller of its sales takes up to 30 days.

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To address this gauntlet of challenges faced by small merchants in their COD transactions, Kadosh said in his presentation they will use various solutions leveraging technology. “We provide a full-suite of technological solutions including fraud, detection, data analysis, and courier optimization, aimed to empower the merchants with abilities to seize control of the COD process, reduce cancellations, and increase revenues.”

Using their client companies’ costumer data, he said they will make data analysis of the data, “building on credit history for COD consumers and use fraud detection in order to minimize cancellations before the parcel leaves the merchants’ warehouse.”

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To optimize courier service, the Payo CEO said they will give access and integration multiple 3PL companies and include real-time tracking even as Payo maintains simplicity of handling all the merchants’ orders in a single place. “Our algorithm optimizes the right couriers for every order,” Kadosh promised.

He said they will manage to cash in order to provide predictable flow of the remittance to the merchants. “We collect, monitor and remit payments from the 3PL companies to the merchants including consistent and clear financial and remittance reports.

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The Payo co-founder said they will control the process to ensure a predictable flow of payments to the merchants, several times in a month. “Moreover, using the merchant’s data, we can enable early and often immediate remittance to help merchants manage the cash-flow and scale up business.”

Payo assured that costumers of their merchant-clients do not have to worry about their data or personal information because they will handle it adhering to the government’s Data Privacy Law.

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Liron Gross, COO of Payo, emphasized this to journalists present during the media briefing. On cybersecurity, Kadosh said they have put in place a tough Israeli security platform, assuring safety for their platform and costumers’ data. He said he sees his company in five years’ time the Philippines’ “biggest platform for the unbanked Filipinos.”

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EDD K. Usman

Presently, Edd Usman is a freelance journalist contributing as Stringer to,, and Malaya Business Insight. From May 2016 to December 2017, he is a senior correspondent of He was also a Senior reporter at Manila Bulletin until April 15, 2016.

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