• Current e-wallet framework targets the banked population and does not help financial inclusion
• No clear path to profitability for telco players whose incentive programmes make them burn through huge amount of capital.
• Grab is rapidly developing its ecosystem but only 25% of all transactions are paid through GrabPay’s cashless services

Since 2018, the mobile wallet war in the Philippines has been heating up with GrabPay entering the fray in May 2018 plus renewed efforts by GCash and PayMaya – the two dominant e-wallets – to introduce QR code payments. GCash further announced in June 2019 that it crossed the 20 million registered users from five million in 2017. More recently, Bangko Sentral ng Pilipinas (BSP) announced, as reported by local media, that e-money accounts rose by 22% to 33 million in 2018. This is composed of five million active e-wallets and 28 million prepaid cards linked to e-money. 

These developments make it appear that the Philippine market is on the verge of accelerated e-cash uptake. However, there are a few issues to keep in mind with this hype on numbers by GCash and to a certain extent, PayMaya, the payments service of Voyager Innovations, PLDT’s digital innovation arm. As of press time, the historical figures cited could not be confirmed by Voyager Innovations to The Asian Banker, as these may refer to different data points that may have changed in recent years, as well as updated user data in 2018.

First, unlike basic and restricted bank accounts which have been introduced a few years ago, e-wallets can be opened conveniently from a mobile phone. The major difference between the restricted or basic account and e-wallet is that these don’t earn interest and are not secured by the Philippine Deposit Insurance Corporation, which, if taken from the point of saving...

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