INTERVIEW
How GCash cornered the Philippines’ sachet economy with SMS-based remittance service With over 66 million users – more than half of the country’s population – what’s next for the fintech firm? PHILIPPINES
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ost people would not remember the long string of numbers that makes up their bank accounts but many will always remember their mobile numbers. This was the idea that latched on to Globe’s decision makers when they created GCash to provide an accessible and efficient way for consumers in the Philippines to handle their financials. GCash was first conceptualised in 2004 as an SMSbased domestic remittance service. This was due to the number of Filipinos working abroad and finding it difficult to send money back to their families as most people in the country are unbanked. “The latest statistics said that 44% of Filipinos still don’t have a bank account. What if we make every mobile number a financial account?” GCash Chief Customer Officer Winsley Bangit said during a quick chat with Asian Banking & Finance. From there, GCash transformed into more than a remittance service. All-in-one financial app GCash would be considered an all-in-one financial app and even a super app. First, there are its e-wallet services. During the pandemic, GCash was the most downloaded financial services app in Google Store and the App Store in 2020 according to mobile data and analytics firm App Annie. According to the report, for nine months since January 2022, the app took the top spot for both Android and iOS users, recording 10 million downloads. GCash grew its active user base by 130% by September of that year compared to 2019. Its other services also grew in popularity. At least one out of five consumers in the Philippines who have bank accounts also has a GSave account, the savings account created by GCash together with CIMB. In its GInvest service, GCash has over four-fifths of total Philippine Unit Investment Trust Fund accounts and at least one-fifth of the market share in PH Mutual Funds. Additionally, one out of three new life, non-VUL (variable universal life) policies in the country comes from GCash. Turning point What helped GCash gain popularity in the Philippines is large because the country is a ‘sachet market’. In retail, this means that consumers would rather buy products in smaller, affordable packs than buy in bulk. So when GCash started to develop and expand its financial services, it brought being a sachet economy into consideration and was mindful of the needs of the consumers in the market. “For example, when we developed GSave, it has no minimum deposit requirements, unlike banks. For those 20 ASIAN BANKING & FINANCE | Q1 2023
When mobility was restricted for both consumers and businesses, GCash was one of the few things that worked (Photo: Winsley Bangit, Chief Customer Officer, GCash)
who wanted to try their hand at investing, our GInvest can let you buy stocks or invest in local stocks for as low as P50 (US$0.91c) and P1,000 (US$18.29) for global funds. We simplify this for our customers by saying that for less than the price of one milktea, they can start investing,” Winsley explained. Another turning point, according to Winsley, that cemented GCash’s dominance over the Philippine market was during the COVID-19 pandemic. “When mobility was restricted for both consumers and businesses, that’s when people turned to technology. And at that time GCash was one of the few things that worked. Now, there are over 66 million users of GCash.” Since we are an e-wallet, we are able to collaborate instead of compete
Key milestones Winsley said that one of the top milestones they evolved their SMS-based services into an app that created easier and faster ways to send money. This is particularly important for an economy like the
