Philippines: GCash 'umuusok' (on fire), e-payments cover more countries
With 86m users, GCash provides fast, secure financial transactions, boosting inclusivity
Manila: Baldino Crisologo, an overseas Filipino worker (OFW) based in the Middle East, wanted to send money to his daughter, who recently delivered a baby girl, in the US.
It’s a baby shopping money for the little one collected from relatives in the Philippines and Canada.
He used to send cash via traditional high-fees remittance companies. Today, Baldino is using GCash, which offers a simpler, quicker and cheaper alternative.
"Umuusok ang GCash (GCash is on fire)," is a typical refrain among people, or groups of people, who engage in e-cash transactions with each other.
The e-wallet company, backed by Filipino, Singaporean, Japanese, Chinese and US investors, has played a pivotal role in revolutionising the payments in the Asian country.
GCash has become a go-to app for everything from sending money to friends and family to paying bills and shopping online.
Bangko Sentral ng Pilipinas (BSP), the country’s central monetary authority, has reported that the share of digital payment transactions to total monthly retail payments in the Philippines grew from 42.1 per cent in 2022 to 52.8 per cent in 2023, based on the E-Payments Measurement Report.
Launched in 2004 as an SMS-based money transfer service, Gcash has grown into a comprehensive digital wallet platform with over 86 million users as of 2023 (Philippine population: 119.1 million, 2023).
Key milestones
BSP data showed that, despite the 170+ years of banking in the country, the banked population stood at only about 56 per cent of all adults in 2021 (less than 6 out of 10).
While this has improved from 3 out of 10 in 2019, GCash has already registered 86 million users (as of end-2023).
Gcash, founded 20 years ago (in October 2004), continues to expand. Its offerings to include bill payments, remittances, online shopping, peer-to-peer transfers, transport, airline ticket payments, insurance, and, now, stocks trading.
- A growing number of stock traders use GCash, a trend that has been gaining ground, with 800,000 investors now using the platform within only two years following its launch.
- Gcash now operates in more than a dozen countries, including North America, Europe, the Middle East, and Asia.
- Recently, Philippine-based digital bank Tonik, has updated its app to allow "top-ups" and payments via Gcash., thus made it more convenient for depositors to add funds to their accounts without leaving the app.
- GCash is rolling out more innovations: it has recently introduced a series of new AI-driven features and added more government payment portals.
Impact
With every village in the Philippine connected to the internet, thanks to the phenomenal rollout "Piso WiFi" boxes, the widespread adoption of digital cash has led to greater financial empowerment, without the need to open mo bank branches.
$61.41b
In fact, millions of business and payment transactions are happening seamlessly every minute across the country, and the world, through such digital wallet platforms.
Alongside its increasing popularity is the challenge for watchdogs. Regulators have imposed daily transaction limits on digital wallets, helping to mitigate losses in case of unauthorised access.
The Bangko Sentral ng Pilipinas (BSP) also monitors unusual or large transactions that may signal fraudulent activity.
Economic growth
Because of its utility, GCash has empowered millions of Filipinos, especially those in rural areas, by providing access to formal financial services.
Its widespread has contributed to the growth of the digital economy and boosted consumer spending.
Digital wallets operators, in general, have also helped improve financial literacy. The hyper-movement of digital cash has boosted is also encouraging more Filipinos to make informed financial decisions.
As an industry, the expansion of digital wallets is relentless: GCash has recently formed strategic partnerships with various businesses (motorcycle taxi company Angkas, digital bank Tonic) and government institutions, making it a convenient platform for everyday transactions.
When scammers use Gcash
While GCash is a popular and convenient mobile payment service in the Asian country, scammers have also used the platform, often targetting GCash users with various tactics, including:
- Phishing: Scammers may send emails or messages pretending to be from GCash, asking for personal information or login credentials.
- Smishing: Similar to phishing, smishing involves sending fraudulent text messages that appear to be from GCash.
- Fake offers and promotions: Scammers often dangle fake deals or promotions to entice users to click on malicious links or provide personal information.
- Social engineering: This techniques is used by scammers to trick users into revealing sensitive information or transferring money.
- As digital wallets like GCash become increasingly popular, regulators are focusing on ensuring security and protecting consumers.
- Two-Factor Authentication (2FA): Bangko Sentral ng Pilipinas (BSP) mandates the use of 2FA for all online transactions to ensure an extra layer of security beyond just passwords.
- Know Your Customer (KYC) Regulations: Digital wallets are required to implement strict KYC processes to verify user identities, preventing fraudulent accounts from being created.
The future of e-wallets
Digital cash is poised to grow in the Asian country, as fintech adoption has surged dramatically. Gcash – and its competitor Maya – continue to grow, compete and innovate. Both are poised to play an even more significant role in the Philippine financial landscape.
Maya Wallet reached 50 million users in 2022, making it the second most-used e-wallet service in the Philippines.
Gcash, now valued at $5 billion following fresh capital infusion from investors, is set to launch its Initial Public offering (IPO), at a yet-undisclosed date.
Given the intense competition in mobile app-based financial services, convenience, security and high adoption of digital wallets, Gcash and Maya are expected to continue providing a seamless and convenient user experience to meet the evolving needs of Filipino consumers.
Users: 86 million registered users in the Philippines (most widely used mobile wallet in the country)
Financial services: Cash transfers, Bill payments, Mobile phone load, Online shopping, Investments, and Insurance, transportation.
Security: GCash employs advanced security measures to protect user data and funds. Users can enable two-factor authentication for added security.