A Beep card dealer for the rails has denied profiteering allegations by selling the cards at higher prices amid current global shortage of chips AF Payments Inc. (AFPI) issued the denial on Monday saying it was even subsidizing the cards in the rail sector.
“For the record, AFPI does not profit from cards sold to the public. On the contrary, we are even subsidizing them in the rail sector,” the company said in a statement.
The company said todate, it has already spent P300 million in subsidies since it started full operations in 2015, by virtue of a concession agreement between AFPI and the Philippine government.
Last year, AFPI spent P9.8 million in card subsidies and will spend P48 million this year. For 2023, the company’s subsidies will be at P70 million, the statement added.
“These subsidies come in the form of the difference between our card acquisitions cost and our selling price,” the company said.
“We purchase the card at about $2-$2.60 (approximately P114-148.50) and sell it to rail operators (PTOs) at P50. The PTO further subsidizes P20 and sells it to commuters at P30,” it added.
In sectors not covered by the Concession Agreement (bus, ferry, retail), beep cards are sold at cost or at a price point that factors in the card cost and distribution cost.
Online channels, meanwhile, would have additional operating costs, packaging, value added tax, and commissions to the online platforms, hence priced a little higher.
“As a response to a strong clamor from our customers to make beep card available online, AFPI allocated 1 percent of its inventory for online sales. We estimated that this should be enough to fulfill the demand for online customers until the end of the year,” AFPI said.
AFPI earlier partnered with l Lazada, Shoppee and Facebook Marketplace to meet the growing demand for its stored value cards.
“However, as of this writing, we may have to discontinue online selling anytime now as we are about to reach 1 percent of allocated cards to be sold online. We have not anticipated that the demand for cards online would be this strong. It is, however, important to note that the bulk or about 94 percent of cards we have still go to the rails/PTOs. This is despite the rails only constituting 18 percent of our entire ecosystem’s acceptance points. We do this because the transaction volumes are currently concentrated in rail,” the company said.
“Our mission is to serve the Filipino commuter the best way we can. We would like to reiterate that at the end of the day, the consumer has a choice as to where to buy their cards. It is our obligation to make these available in the channels they prefer to purchase in. We are, however, guided by specific allocations for each of these channels,” the company added.
AFPI added that it has delivered a total of 150,000 cards to the PTOs, effectively supplying 80 percent of the total orders of PTOs for 2022. “We are awaiting the delivery of our additional orders in the next few weeks, to be able to supply the balance of 20 percent before the year ends,” the company said.