PayMaya expands to digital banking

CEBU, Philippines —  Mobile wallet operator PayMaya, through its owner company Voyager Innovations, announced to open a digital bank in a race to fast track financial inclusion in the Philippines.

The expansion announcement was made following a US$167 million fresh capital infused to the company by KKR, a global investment firm; and Tencent, a leading technology company in China. Voyager welcomed IFC Financial Institutions Growth Fund, a fund managed by the IFC Asset Management Company (“IFC AMC”), as a new investor, and PLDT.

IFC AMC is a division of the International Finance Corporation (“IFC”), a member of the World Bank Group, and an existing investor in Voyager.

According to Orlando B. Vea, Voyager and PayMaya CEO-Founder, the fundraising marks another milestone for Voyager after having successfully grown PayMaya’s mobile wallet, payments processing, and digital remittance businesses.

Voyager is now leveraging this unique ecosystem to expand into digital banking for the next phase of its mission to improve financial inclusion in the Philippines. Towards this end, it applied for a digital bank license with the country’s central bank, the Bangko Sentral ng Pilipinas (BSP), he added.

Voyager will use the new funds to expand its PayMaya services and to continue enabling more unbanked and underserved individuals and MSMEs with new and inclusive products, such as credit, insurance, savings, and investments, through a soon-to-be-established digital bank.

Once granted, a digital bank license by the BSP, the new entity will provide mobile-first, low-cost, round-the-clock, frictionless, branchless, ubiquitous, paperless, secure, and smart neo-banking services on the back of PayMaya’s proven technology platforms.

“We have seen a quantum leap for digital payments adoption in the Philippines over the past year, and PayMaya has served as the nexus connecting consumers and enterprises with enriching digital finance experiences. This investment supports the unique value we bring and gives us a natural head start with the target market for the digital banking service,” noted Vea.

Voyager and Paymaya president Shailesh Baidwan also expressed commitment to enable the large masses of Filipinos to leapfrog into a new stage of financial inclusion through integrated digital financial services.

“Our goal is to continue making lives better for millions of underserved people and small businesses, with cutting edge solutions that are affordable and relevant,” sakd Baidwan.

PayMaya has also made it easier for Filipinos - whether banked or unbanked - to add money, cash out, make payments, and remit funds through more than 250,000 digital-finance access touchpoints, seven times the number of the ATMs and bank branches in the country. This expanded access is significant for an archipelagic nation where 33 percent of cities and municipalities do not have any banking presence.

Combining the power of its enterprise and consumer businesses, PayMaya is spurring digital commerce in the Philippines through its PayMaya Mall, an in-app feature directly connecting over 350 enabled merchants to retail consumers.

Its enterprise business saw exceptional growth, posting a four-fold increase in merchant acceptance points equipped with innovative payment solutions that accept credit, debit, and prepaid cards, as well as e-wallets, for both face-to-face and online transactions. Fueling this jump is the micro, small, and medium-sized enterprises (MSME) segment, the focus of PayMaya’s rollout for innovative payment and financial services.

Aside from enabling the payment acceptance for the largest e-Commerce, food, retail, and gas merchants in the Philippines, PayMaya equips over 70 national and social services agencies and local government units with digital payments and disbursement services. It is also the first financial technology company to adopt QR Ph, the national standard for merchant payments.

In January this year, PayMaya began expanding its digital financial services offerings with “sachet” loans for MSMEs through its lending arm, PayMaya Lending Corp., and health and device protection products with insurance partners.

PayMaya introduced its first lending product called Negosyo Advance last January among its 40,000-strong Smart Padala agent network--the most extensive network for domestic remittance and adjacent financial services in the country. Smart Padala agents are typically microentrepreneurs in communities who need short-term working capital loans for their day-to-day businesses.

With insurance partners, PayMaya offers PayMaya Protect for health coverage, starting with COVID-19 and personal accidents. It also offers protection for mobile devices, with premiums that can cost less than Php1 (US$0.02)1 daily for cracked screens, water damage, and other incidents.

In the Philippines, only one in three Filipino adults has a formal bank account and has loans. Of those who have loans, only three percent have borrowed from banks, and more than 77 percent and 75 percent of the population do not have insurance and investments, respectively.

The BSP aims to digitalize 50 percent of the total volume of retail payments and expand the financially included to 70 percent of Filipino adults by 2023.