By: Wendell Tan
While this is a welcome development, lower transaction costs can only do so much to accelerate digital payment adoption across the country.
The Philippines has made meaningful progress toward a more digital financial ecosystem, but adoption remains uneven due to structural barriers that extend well beyond pricing.
The next phase of digital payment growth must therefore address three conditions together – access, everyday utility and building the financial architecture required to sustain trust at scale.
Wider access
As of 2025, only 50 percent of Filipino adults held a financial account. Long-running barriers such as insufficient income, lack of documentation, limited financial literacy and distrust of financial institutions continue to discourage account ownership and usage.
As such, a zero-fee transfer has little value to someone who cannot open an account or does not feel confident using one.
Financial inclusion must begin with easier entry. Consumers need simpler account-opening processes, proportionate customer due diligence and practical financial education. Financial institutions, in turn, need products and operating models that make it commercially viable to serve customers with low balances and irregular incomes.
This is where fee policy must be placed in context. Lower transaction costs can support adoption, but only when people can first enter the system and find enough value to stay.
Removing fees without addressing access may improve the experience of existing customers while leaving the underlying gap largely unchanged.
Everyday utility
Opening an account is not the same as adopting digital payments. Adoption occurs when people can use digital services reliably for everyday needs—and when doing so is easier than using cash.
Digital banks in the Philippines have helped lower entry barriers through minimal deposit requirements, online onboarding and alternative credit scoring. Traditional institutions have responded with their own digital offerings, including RCBC’s DiskarTech and UnionBank’s UnionDigital Bank subsidiary. The arrival of Google Pay and Apple Pay, alongside the expansion of QR-based payments, gives consumers more ways to pay.
These developments matter, but product launches alone are not the measure of progress. The real test is whether a market vendor, gig worker, remittance recipient or small business can receive, store, transfer and spend money digitally with less friction and greater confidence.
Competition should therefore shift from the number of digital features offered to the quality and relevance of the customer experience. Institutions that understand how Filipinos earn, spend, save and move money will do more for adoption than institutions that simply add another payment channel.
Building trust
Individual products cannot create sustained adoption if the wider system remains fragmented. A robust financial system requires an architecture that provides the foundation for growth and stability.
Banks, digital banks, e-wallets, merchants and consumers must be connected through payment rails that are interoperable, secure, reliable and easy to access.
This requires more than technical connectivity. Consumers need clear protections, dependable dispute resolution and confidence that their money and data are safe. Merchants need simple acceptance tools and predictable settlement. Financial institutions need standards that allow them to compete on service without forcing customers into closed networks.
Market competition can improve products, but it cannot establish system-wide rules on its own. The BSP and other public stakeholders must continue updating regulations to reflect how digital finance now operates while protecting consumers and preserving room for innovation.
Ultimately, the goal should not simply be to make individual transfers cheaper. It should be to create a financial architecture in which Filipinos have enough trust to make digital financial services part of their everyday lives.
Beyond fees
The Philippines does not need to choose between lower transfer fees and deeper reform. It needs both, in the right sequence. Price matters after people can enter the financial system, find reasons to use it and trust it with their everyday transactions.
For financial institutions, the priority is to compete on reach, relevance and service quality. For the government, it is to create the interoperable and secure conditions that allow that competition to expand the market rather than fragment it.
The next policy question should be how many Filipinos can use digital financial services confidently and repeatedly for needs that matter to them. —Ed: Corrie S. Narisma
Wendell Tan is a principal in Arthur D. Little’s Financial Services practice, with over a decade of experience advising banks, fintechs, regulators and central banks across Southeast Asia, Europe and Africa.
His work includes modernizing national payment systems, supporting real-time payment integration and shaping capital market policies. Based in Malaysia, he brings a global perspective from having lived and worked across the US, UK, Germany, Hong Kong, South Africa and Southeast Asia.
