How Fintech Companies Enable Financial Inclusion in the Philippines

Highlights

• Financial inclusion in the Philippines goes beyond account ownership and depends on daily access to payments, savings, credit, and remittances that fit real-life needs.
• Mobile wallets, app-only banks, digital lending, and remittance platforms play a central role in bringing financial services to underserved and remote communities.
• Data-driven models transform everyday transactions into usable financial profiles, opening first-time credit access for individuals and small businesses.

Understanding Financial Inclusion in the Philippine Context

Financial inclusion in the Philippines goes far beyond opening a bank account. It’s about whether people can actually use financial services in daily life, when they need them most. In this section, we’ll look at how inclusion is defined locally, why gaps still exist, and where digital finance fits into the picture.

What Financial Inclusion Means in the Philippines

Financial inclusion often gets measured by account ownership, but that tells only part of the story. BSP survey reported by The Philippine Star found that account ownership rose to 56% in 2021 from 29% in 2019 while e-money account ownership grew to 36% from 8% over the same period. Many people hold an account yet rarely use it for anything meaningful.

True inclusion means having practical access to payments, savings, credit, insurance, and remittances. These tools need to work in real situations, paying bills, sending money home, or handling unexpected expenses.

Daily usage matters more than formal enrollment. A mobile wallet that supports small transactions or frequent transfers can be more relevant than a traditional account that stays inactive.

Why Financial Inclusion Remains a Challenge

Large gaps persist despite years of progress. These barriers don’t come from a single source, they stack up and reinforce each other.

• Cash-heavy habits: Many transactions still happen informally, outside the banking system. Cash feels familiar, flexible, and trusted, especially for small purchases and peer-to-peer payments.
• Geographic distance: The country’s island geography makes branch access difficult. For rural communities, reaching a bank can mean hours of travel and lost income.
• Documentation and trust gaps: Formal requirements, ID checks, and long onboarding processes discourage first-time users. Past experiences with institutions also shape hesitation.
• Uneven digital readiness: Internet access and device usage vary widely, and even as mobile adoption grows, GSMA notes smartphone adoption was 86% in 2023 and is set to rise to 92% by 2030, which still leaves a gap for people who are hardest to reach.

These factors combine to keep many people partially included or completely excluded. For many providers, closing these gaps becomes part of a wider digital transformation effort, updating onboarding, payments, and service delivery so access doesn’t depend on proximity to a branch.

Why Fintech Companies Is Crucial for Inclusion

Digital finance steps in where traditional models struggle. Mobile-first financial providers reshape how services reach people, especially those long overlooked.

• Lower entry barriers: App-based financial services simplify onboarding and reduce paperwork. Smaller balances and flexible requirements make first-time use feel possible.
• Reach beyond branches: Mobile access brings services to remote areas without building physical infrastructure. A phone becomes the entry point to payments, transfers, and savings.
• Designed for everyday use: Technology-driven finance models focus on small, frequent transactions. This fits how people actually manage money, not how banks expect them to behave.

These platforms don’t just add convenience. They reshape participation by meeting users where they already are, both digitally and financially.

Watch more: Top 5 Types of Digital Banking Services in the Philippines

How Fintech Companies Are Expanding Financial Access in the Philippines

Access improves fastest when financial services fit into daily routines. In the Philippines, mobile phones have become the main gateway to payments, savings, and transfers. Now we’ll explore how fintech companies extend financial access through practical tools people already use, often without realizing they’ve joined the formal system.

Mobile Wallets and Digital Payments

Mobile wallets sit at the center of everyday digital finance. They allow users to pay bills, send money, and settle purchases without opening a traditional bank account.

For small merchants and micro-businesses, QR-based payments remove friction at the point of sale. A printed code replaces card terminals and long setup processes, which makes acceptance easier for street vendors and neighborhood stores.

At national scale, platforms like GCash show how digital payment apps can reach millions. Reuters reported in 2024 that Mynt, the operator of GCash, was valued at $5 billion and served over 94 million registered users. Its wallet-first approach fits frequent, low-value transactions that cash once dominated.

Digital Banks and App-Only Banking Models

App-only banks remove the physical branch from the equation. Accounts open through a smartphone, with deposits, payments, and loans managed inside a single app.

Documentation requirements stay lighter, and balance thresholds feel more realistic for first-time users. This design speaks directly to people who previously saw banking as out of reach.

Licensed players like Tonik illustrate how mobile-first financial providers can operate fully within regulation while keeping the experience simple and accessible.

Alternative Lending and Credit Access

Traditional credit scoring leaves many people invisible. Lending platforms take a different route by reading behavior instead of paperwork.

Transaction history, payment patterns, and mobile usage help assess risk for thin-file customers. The need is huge since one paper on MSME financing in the Philippines cites an IFC estimate of a USD 221.8 billion MSME financing gap, equal to 76% of the country’s GDP. Informal workers and micro-entrepreneurs gain access to loans that match how they earn and spend.

Approval cycles move faster, and loan sizes stay aligned with short-term needs. These platforms focus on practical borrowing rather than long-term credit commitments.

Remittances and Domestic Money Transfers

Money sent home fuels household spending across the country. Digital remittance platforms shorten transfer times and lower fees compared to counter-based services.

OFWs and domestic workers rely on these apps to support families in rural areas. BSP reported personal remittances hit an all-time high of US$3.73 billion in December 2024, up 3.0% year on year. Funds arrive directly in wallets or digital bank accounts, ready for immediate use.

Integration across apps is important here. When transfers link smoothly with payment and savings tools, recipients stay engaged with digital finance rather than cashing out immediately.

Micro-Transactions and Everyday Financial Touchpoints

Small actions build long-term participation. Bill payments, airtime top-ups, and transport credits introduce users to digital finance through familiar tasks.

Each transaction leaves a data trail that helps these platforms understand behavior and tailor services over time. Users move gradually from basic payments to savings or credit without a hard transition.

Convenience drives adoption. When financial technology platforms fit into daily life, inclusion becomes a habit rather than a one-time decision.

Data Inclusion: A New Foundation for Financial Access

Access doesn’t stop at opening an account. Real participation grows when financial activity leaves a usable record that works for both users and service providers. In this section, we’ll focus on how data reshapes inclusion across the digital finance sector, especially for people long overlooked by formal systems.

From Account Ownership to Data-Driven Inclusion

Counting accounts once served as a simple benchmark. It now falls short of showing how people actually interact with financial services.

Many Filipinos earn, spend, and transfer money outside formal channels. When mobile wallets and digital payment apps record these daily actions, informal behavior turns into visible financial activity.

This shift changes how inclusion gets measured. Usage patterns start to matter more than paperwork, and everyday transactions become proof of participation.

Alternative Data and Credit Scoring

Credit-scoring platforms rely less on traditional histories and more on behavior. Mobile usage, payment frequency, and transaction consistency act as signals of reliability.

These data points help lending platforms understand users who lack formal credit records. People who once appeared invisible now build profiles through regular activity on their apps. Behind many of these models sits AI and Data Analytics, turning large volumes of transaction signals into risk checks, product personalization, and smarter credit decisions without forcing users through extra paperwork.

For users, this feels subtle. A bill paid on time or a steady flow of wallet transactions quietly strengthens future access.

Implications for Individuals and SMEs

Individuals gain their first path to formal credit without stepping into a bank branch. Small loans match real cash flow rather than rigid lending rules.

Small businesses benefit in a similar way. Informal merchants build credibility through sales, payments, and repeat customers tracked digitally.

Across the broader financial technology space, this data-first approach allows fintech companies and other digital finance providers to support growth that starts small but compounds over time.

The Role of Regulation and the Fintech Ecosystem

Financial inclusion grows faster when rules support innovation without slowing it down. In the Philippines, policy makers shape how digital finance expands, who can participate, and how trust gets built. Below we’ll go into how regulation guides the fintech ecosystem while keeping users protected.

How Regulators Support Fintech-Led Inclusion

Public oversight sets the tone for how digital financial platforms operate. Clear licensing paths give app-based financial services room to grow while staying accountable.

Digital banking licenses open the door for app-only banks to operate fully online. Payment modernization initiatives also push banks and non-banks toward shared standards that support wider access.

Test-and-learn programs help new models enter the market without rigid upfront rules. Oversight from institutions like Bangko Sentral ng Pilipinas keeps these experiments aligned with financial stability and consumer interests.

National Payment Infrastructure and Standards

Shared infrastructure makes everyday digital finance possible. Interoperable real-time payments allow money to move between wallets, banks, and merchants without friction.

National QR standards support small businesses by giving them one code that works across apps. This lowers adoption hurdles and encourages cash-light transactions in markets, transport, and local retail. Building and maintaining these rails often depends on strong integration work and reliable application development practices across banks, wallet providers, and shared switches.

Government-backed initiatives also play a role. When public services accept digital payments, usage becomes routine rather than optional.

Balancing Innovation, Security, and Consumer Protection

Growth brings new risks that can’t be ignored. Cybersecurity and data privacy shape how much trust users place in these platforms.

Clear rules around data use and security practices help protect users as their financial activity moves online. Trust builds when people feel confident their information stays safe. That’s where consistent cyber security controls, monitoring, and incident response planning start to matter as much as product features.

Digital literacy ties everything together. When users understand how apps work and how to spot fraud, technology-led financial services gain long-term credibility. In this environment, fintech companies operate within guardrails that support inclusion without sacrificing confidence.

Barriers That Still Limit Financial Inclusion

Progress doesn’t move in a straight line. Even as digital finance expands, real obstacles continue to slow adoption for many Filipinos. In this part, we’ll focus on the gaps that still shape access across the local fintech landscape.

Infrastructure Gaps

Technology relies on connectivity. In many rural areas, internet access stays unreliable or unavailable for long periods. A PIDS release notes that while the Philippines has 99% 4G coverage and 70% 5G penetration, an Ookla report in August 2023 still showed average fixed broadband download speeds of 25.47 Mbps and upload speeds of 6.21 Mbps.

Mobile wallets and digital payment apps lose value when signals drop or devices can’t stay online. Cash-in and cash-out points also remain limited outside urban centers, which makes digital balances harder to convert into daily spending power.

These gaps create uneven experiences. Some users enjoy smooth access, while others face frequent interruptions.

Adoption and Trust Issues

Awareness doesn’t spread evenly. Many people still don’t understand what app-based financial services can do or how they differ from informal options.

Concerns around fraud and data misuse add another layer of hesitation. Stories of scams travel fast, often faster than education or reassurance.

Trust grows slowly. These platforms need time, consistent performance, and visible safeguards before users feel comfortable relying on their apps.

Digital and Financial Literacy

Access alone isn’t enough. Using financial tools confidently requires basic digital skills and an understanding of how transactions work.

Some users download apps but stop after a single attempt. Others avoid features they don’t fully understand, even when those tools could help them manage money better.

Education needs to move alongside deployment. When skills improve, technology-led financial services and fintech companies gain stronger engagement and longer-term participation.

See more: Choosing the Right Digital Lending Platform for Philippine Markets

How SmartOSC Supports Fintech-Driven Financial Inclusion

Technology only creates value when it fits local realities. SmartOSC works with digital finance providers and financial institutions to build platforms that scale without losing reliability or trust.

Secure digital banking platforms form the foundation. Our digital banking work supports app-only banks and mobile-first financial providers that need stability from day one, even as user volumes grow.

Interoperable payment systems come next. By connecting wallets, banks, and third-party services, SmartOSC helps financial technology platforms operate smoothly within the broader financial technology space.

Data platforms and cloud infrastructure support daily operations behind the scenes. Compliance requirements stay embedded in system design, which helps these platforms meet regulatory expectations without slowing product rollout.

Across the Philippines, this approach helps fintech companies and established institutions reach underserved users through services that feel simple on the surface but stay strong underneath.

FAQs: Fintech Companies

1. What are fintech companies?

Fintech companies are businesses that use digital technology to deliver financial services. These services include payments, digital wallets, lending, insurance, remittances, and banking features delivered through mobile apps or online platforms instead of traditional branches.

2. How do fintech companies differ from traditional banks?

Fintech companies typically operate with fewer physical locations and rely on software, cloud infrastructure, and data analytics. This setup supports faster service launches and broader reach, especially for users who struggle to access traditional banking.

3. Why are fintech companies important for financial inclusion?

These platforms lower barriers tied to paperwork, minimum balances, and location. Mobile-first access allows unbanked and underbanked users to send money, pay bills, and access credit using only a smartphone.

4. Are fintech companies regulated in the Philippines?

Yes. Regulation depends on the services provided. Payment providers, digital banks, and lending platforms must follow rules set by the central bank and other relevant authorities.

5. What risks should users consider when using fintech services?

Data privacy, cybersecurity, service reliability, and fee transparency remain key concerns. Using licensed providers, activating security features, and understanding terms help users stay protected.

Conclusion

Financial inclusion in the Philippines keeps moving forward as digital tools meet people where they already live and transact. Mobile wallets, app-only banks, data-driven lending, and shared payment rails turn daily activity into real access. When these systems work together, fintech companies help shift finance from occasional use to everyday habit. Progress still depends on trust, infrastructure, and education, but the direction is clear. If you’re building or scaling financial platforms that serve real communities, now’s the right time to start the conversation. We’re ready when you are, just contact us today.