Philippines Payments Market Trend Analysis (2025 Forecast)

The Philippine payments market has grown rapidly in recent years, driven by factors such as accelerated digitisation, the spread of fintechs and a young demographic dividend. Below are the current key trends and key points of analysis:

1. Rapid growth of digital payments

• E-wallet dominance: GCash (owned by Globe) and Maya (formerly PayMaya) dominate the market, both surpassing 50 million users (covering nearly half the population). Both offer money transfers, bill payments, code shopping and even investment services.
• Low bank account penetration: Only about 30% of adults have a bank account, but e-wallets fill this gap through an easy registration process (only a mobile phone number is required).
• government support: The Bank of the Philippines (BSP) has launched a "Digital Payments Transformation Roadmap", which aims to digitise 50% retail transactions.

2. Opportunities for cross-border payments

• Demand for remittances from overseas workers: The Philippines is one of the world's leading exporters of labour, with overseas remittances reaching $37 billion in 2023.GCash partners with Western Union, Alipay+ access to local merchants to serve Chinese tourists.
• Regional cooperationFor example, GrabPay in Singapore interoperates with GCash to facilitate seamless payments within the Southeast Asia region.

3. Emerging technology applications

• QR code standardisation: BSP promotes the "QR Ph" standard to harmonise local and cross-border code-scanning payments (e.g. PromptPay in Thailand).
• test the waterBNPLservice Maya's "Buy Now, Pay Later" feature targets the needs of low and middle income groups for consumer instalments.

4. Challenges and risks

• Cash dependency inertia : Cash transactions are still preferred in small and medium-sized cities and rural areas.

5. Challenges and risks (continued)

• Cash dependency inertia: Despite the rapid growth of digital payments, a large number of small and medium-sized cities and rural areas in the Philippines still rely on cash transactions. According to World Bank data, about 60% of adults still use informal financial channels (e.g., pawnshops, private lending).
• Infrastructure constraints: Uneven network coverage (especially on remote islands), insufficient smartphone penetration (around 70%) and low-end machine performance limit the use of complex payment applications.
• Fraud and cybersecurity issues: 2023 Philippine central bank report shows 35% year-on-year increase in e-fraud cases, with common tactics including phishing text messages, fake customer service scams, and more.

6. Policy and regulatory developments

• Open Banking Framework Advances: The BSP plans to launch an open API standard in 2024 to allow third-party developers to access bank data (similar to PSD2 in Europe), potentially spawning more innovative financial products.
• Digital Currency Exploration : The Philippines has launched a wholesale central bank digital currency (CBDC) pilot, but there is no clear timeline for retail CBDCs.

7. Competitive landscape and corporate strategies

(1) Local Giants vs. International Players

(2) Transformation of traditional banks

• BDO Unibank, BPI and others have accelerated the iteration of their apps, for example, by launching "cardless ATM cash withdrawals" (generating a temporary QR code from a mobile phone).

8. Projections of future trends

1. Embedded Finance : More NBFCs (e.g., telecom company DITO, e-commerce platform Lazada) will embed payment/credit services.
2. Agency network expansion : Sinking the market through community shops and "sari-sari stores" (grocery shops) that act as recharge/withdrawal agents.
3. Deepening cross-border connectivity : Possible bilateral QR code mutual recognition agreements with DuitNow Malaysia or UPI India to reduce remittance costs.

Suggested Points of Attention

9. Suggested points of concern (continued)

(1) Sinking Markets and Financial Inclusion Opportunities

• Agency Network Expansion: GCash and Maya are reaching rural areas through "Cash-in/Cash-out" agents (e.g., convenience stores, pharmacies, street stalls), with the potential for further integration of local supply chains (e.g., payment for agricultural products) in the future.
• Low-threshold credit products: Demand for buy now pay later (BNPL) and microfinance for people with no credit history is growing rapidly, but there is a need to balance risk control with inclusiveness.

(2) Deepening of scenario-based payments

• Digitisation of public transport: The Manila light rail system has piloted GCash code-sweeping for rides, which may be extended to traditional modes of transport such as the Jeepney in the future.
• Social e-commerce convergenceFacebook Marketplace and TikTok Shop are exploding in the Philippines, and eWallet may launch a "one-click payment + commission sharing" feature to empower small and micro sellers.

10. Directions for technology-driven innovation

11. Long-term impact of COVID-19

Although the peak of the epidemic has passed, it has accelerated the following trends:

• Zero-touch payment habits solidify : Continuous promotion of QR code ordering/payment in the catering and retail sectors.
• Digitalisation of government subsidies :: Poverty alleviation programmes, such as the "4Ps" programme, which reduces intermediary corruption by distributing allowances through GCash.

12. ESG and social value