This deal, which is subject to approval of relevant government authorities, is set to further cement Tonik's position in digital credit inclusion in the Philippines.
Through the acquisition of TendoPay, Tonik has now augmented its core lending portfolio while integrating payroll-enabled financial services into its operations.
Payroll-enabled financial services are a growing credit mechanism globally, though still relatively new in the Philippines. Payroll connectivity enables accessible and multi-use credit to salaried workers through partner companies, which helps in increasing employee engagement and retention.
Moreover, with the current level of innovation in fintech, deepening banking infrastructure is possible for all payroll and benefits platforms. The employer can fund their own deposit account in these providers and fund this account based on projected payroll. Tax withholdings set aside quarterly can earn interest before being paid out at the state and federal level.
Without the need of multiple ACH transfers, there’s an overall cost and time savings with funds being kept in this closed loop framework.
Launched in 2019, TendoPay is a one-stop shop for employees' financial wellness needs. It has partnered with over 200 companies and has developed a channel network covering over 500 brands and ecommerce sites.
TendoPay offers a broad digital suite of financial services such as its 0% interest purchasing loan, emergency cash loan, personal finance management tool, virtual card, prepaid health insurance cards, and a rewards program.
In September 2022, booking platform Alternative Airlines has partnered with TendoPay to offer Buy Now, Pay Later (BNPL) services in the Philippines. The newly introduced payment option allows Alternative Airlines’ Philippine-based customers to select the option of paying in instalments when booking flights, an option that is novel for TendoPay’s customers, as Alternative Airlines is their only flight merchant.
That was not the first partnership of this kind for TendoPay as it partnered with Shopify in September 2020 to enable instalment payments for ecommerce. That collaboration offered customers the option to use TendoPay on any store that is built using Shopify.
The digital ecosystem has transformed the global financial landscape. As part of the trend of collaboration and partnerships that has emerged during this transformation, mergers and acquisitions have risen considerably.
As innovations have made great leaps forward in a short space of time and global digitalisation has been made necessary, the expense of switching over legacy systems to digitally-native platforms has resulted in more partnerships, with larger companies merging with smaller technology entities to scale and upgrade their tech.
It was only a natural step for Tonik to acquire TendoPay, as it raised USD 131 million in Series B funding only in February 2022. The funding was intended to be used to accelerate the growth of Tonik Digital Bank in the Philippines.
Therefore, the news of Tonik launching two lending products, Flex Loan and Big Loan, came as no surprise, especially when they came after the implementation of InstaPay services in a bid to improve the user experience of its users with real-time transactions.
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