Digital wallets flourish

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    The financial technology business of the country’s two telecom operators and which are responsible for the rollout of electronic or digital wallets in the market are expected to break even or even achieve profitability in the next two to four years.

    PLDT Inc. through Voyager Innovations Inc. operates PayMaya while Globe Telecom Inc. unit Globe Fintech Innovations Inc. (Mynt) has GCash.

    Both firms have secured investments from foreign players to finance the rapid expansion of their digital wallets business.

    Manuel Panglinan, PLDT chairman, said PayMaya throughput has been growing and is projected to break even by 2024 and hopefully be profitable a year after.
    Pangilinan said Voyager will be able to raise funding good for the next three to five years.

    “The throughput, the number of accounts, the number of transactions are increasing month-on-month, so (we are) optimistic,” Pangilinan said at a sideline interview in a recent company event in San Juan City.

    PayMaya is targeting to hit a trillion pesos worth of transaction volume annually starting 2022 due to increasing usage of consumer and enterprises business clients.

    Currently, the company generates several billion pesos worth of transactions yearly.

    In 2018, Voyager secured a $215-million investment from global investment firm KKR, Chinese internet firm,Tencent Holdings Ltd. and International Finance Corp. (IFC) and IFC Emerging Asia Fund.

    In 2017, Ant Financial , operator of Alipay, entered into a joint venture with Globe Telecom and Ayala Corp. to boost the operation of Mynt, operator of GCash.

    Albert de Larrazabal, Globe chief commercial officer, told Malaya Business Insight based on Credit Lyonnais Securities Asia assessment, the value of GCash stood at $700 million as of end September, a significant improvement from $100 million valuation when Ant Financial bought 45 percent of Mynt in 2017.

    “… it does suggest that there is already a significant contribution or increase in value that we have been able to generate with all of the effort we have done for GCash in the last couple of years,” De Larrazabal said.

    But he admitted Mynt is still losing money. “Through time, …it will turn (around), because clearly the market already sees the value and the benefits of investment we made in  growing the ecosystem in the valuation they made,” De Larrazabal said.

    He declined to give the timeline when GCash would be profitable but said the valuation would hit $1 billion in 18 months and hopefully be profitable.

    “Give us another may be 18 months, it depends … it will be $1 billion,” De Larrazabal said.

    Currently, e-wallets only account for 21 percent of transactions done through electronic commerce, with cards, cash-on delivery, and bank transfers taking the top three places for payment options.

    A statement released by Globe citing Statista’s report, the e-commerce sector is expected to grow to a $1.32 billion industry, a 58-percent jump from $835 million in 2018.

    Both PLDT and Globe support the National Financial Inclusion goals of the country and the aim to increase digital transactions in the country to 20 percent by 2020 under the National Retail Payment System .