The Philippine Digital Payments Sector
The Philippine Government is working to strengthen its Digital Payments Transformation Roadmap 2020-2023 and convert at least 50% of payments into digital and onboard 70% of adults into the financial system. In June 2021, the Bangko Sentral ng Pilipinas (BSP) launched its Open Finance Framework, a policy framework to enable portability, interoperability, and collaborative partnerships between BSP-supervised financial institutions and fintech players.
The Digital Payments Transformation Roadmap includes:
• Innovative digital financial products and services.
• National ID System supported by more modern payment services that will facilitate real-time processing of financial transactions.
• Payment streams (currently there are two payment systems: InstaPay instant payment stream and PESONet batched payment stream).
• Digital finance infrastructure to facilitate interoperability of payment services and seamless transaction processing.
• Digital governance standards to protect the integrity of consumer data privacy. Currently, the Government uses the National Quick Response Code Standard (“QR PH”) and intends to extend its use (from person-to-person to include person-to-merchant payments).
• “Digital banks” as a new bank classification for end-to-end processing of financial products and services through digital platforms and electronic channels.
The Philippine banking sector includes 46 universal and commercial banks, 48 thrift banks, and 441 rural and cooperative banks with combined resources totaling approximately $385.6 billion. Commercial banks dominate the banking sector and account for around 92.8% of the banking system’s total resources. There are over 50 Philippine fintech companies at different stages of operations and development to support the requirements of the emerging digital finance marketplace. The Philippine banking and fintech industries need to be up to speed with digital technologies to support the digital transactions growth spurred by the pandemic.
Major Philippine digital banks include Overseas Filipino Bank, Tonik Digital Bank, Inc., UNObank, GOTyme, Tyme, Maya Bank, CIMB Philippines. Philippine companies, GCASH and PayMaya, dominate the electronic payment market. International digital payment companies include U.S. mobile payment applications, Apple Pay, PayPal, and Google Pay; ING (Netherlands) and Tonik (Singapore).
U.S. digital financial technologies and consulting services companies are encouraged to connect with Philippine entities to participate in digital finance transformation initiatives. The Commercial Service in Manila is able to facilitate communication with these industry players and for more information, please contact Commercial Specialist Thess Sula at Thess.Sula@trade.gov.