The E-Money Evolution:

GCash Case Study

GCash has played an integral role in keeping not only the economy going this year,

but keeping Filipinos safe and sane during the pandemic. It’s pretty obvious that not only

heads of households and young adults use the GCash app for their financial lifestyle, but

even consumers that advocate a greener Philippines, in maximizing what our platform has to

offer. GCash is also revolutionizing the way Filipinos handle their money. As of November

2020, 3 million GSave accounts have been opened, demonstrating how banking behavior is

shifting from traditional physical branch visits, to simply transferring to a digital savings

account. Lending is another example: Over PHP 8 billion have been extended to more than

900,000 Filipinos in need of funds through the app’s GCredit service, disrupting existing

processes for loans in the country. Shopping is another use case consumers have applied

GCash to: this year alone, Filipinos spent over P16 billion on popular online shopping sites

such as Lazada and Shopee. Meanwhile, more than 600,000 merchants and social online

sellers opened up shop during the pandemic with GCash as the primary mode of payment.
Introduction

GCash, a Philippine mobile money service offered by Globe Telecom, is one of the

first such services in the emerging markets and is widely considered a success, together with

its local peer Smart Money. GCash is one of two FinTech companies owned and operated by

Mynt. It offers a range of payments, transfers, investment, savings, insurance and credit

services to its over 33 million registered users and currently has more than 600,000 social

sellers & partner merchants across the Philippines.

GCash continues to empower more Filipinos with digital financial tools and services,

allowing for safe and convenient transactions amidst the various levels of quarantines. The

increasing adoption of GCash even for fishermen selling their catch and accepting payment

via GCash. GCash has focused on its singular goal of providing purpose-driven financial

technology to empower the underserved. Yet, despite being one of the country's first movers

in mobile payments, they faced some challenges in communicating the level of innovation

they continue to achieve and pursue. GCash’s partnership with Alibaba Cloud’s all-in-one

data analytics platform provided GCash with various machine learning algorithms that can be

used for data analysis.

Sharp insights enable Gcash to better understand its customers’ evolving needs and

develop appropriate solutions. Alibaba Cloud’s enterprise-grade services ensure data

security, while the ability to add and remove services through the cloud reduced operating

and maintenance costs. Ultimately, GCash was built to make it easy for its customers to love

the way they lived. On top of all this, the challenge lay in communicating this vision to a

market that is largely skeptical, or unfamiliar at best, with tech that catered to their financial

needs.
The Case

  In the past, GCash struggled with rapid user growth. The company was using an on-

premise legacy platform that was not optimized to support user growth. When the platform

hit maximum capacity, there were periods of downtime that resulted in missed transactions

and customer frustration and service disruptions threatened to damage the brand’s reputation.

Scaling up the legacy platform proved time and cost intensive. Obtaining and installing

additional hardware required human resources, while new hardware licenses entailed costly

fees. Each time user growth surpassed the platform’s capacity, GCash had to repeat the

process. The company needed a cost-efficient solution that enabled them to scale in real time.

Over the years, GCash has transformed itself from just being a mobile wallet to being a

lifestyle superapp. Both the convenience and the security it provides has convinced it's

millions of users to welcome it as a staple of their everyday lives. With GCash's growth

momentum, now is the perfect time to build an even stronger foundation for a more scalable

product; one that can transform the day-to-day of Filipinos.

 GCash incurred losses in the billions of Philippine Peso each in 2018 and e-wallet players

are trying to create a habit and achieve critical mass, at some point this strategy has to pay

off. In pursuing cashless payment services, GCash followed a pure digital distribution model,

focusing on the tech-savvy users of the urban areas. GCash currently offers a more

comprehensive set of payment and finance features such as scan to pay, where users can pay

directly on Lazada, invest in money market funds or transfer funds to partner banks. GCash

also launched a blockchain-based cross-border digital wallet remittance service in June 2018.

GCash as an app, which has been available in the market since 2012, has hardly gained any
traction until Ant Financial made an undisclosed investment into Globe Fintech Innovations

Inc. (Mynt) in 2017 to scale up digital payments and jointly establish a QR code with Alipay.

GCash continued to promote financial inclusion and expand the mobile money

ecosystem, ending the year with 75,000 QR merchants, 30,000 cash-in points and 400 partner

billers who accept GCash payments. On top of the ecosystem expansion, Customers can cash

in at a Globe Centre for no charge, and can withdraw funds for a 1% fee, and staff assist

customers and serve as a contact point for issues that cannot be resolved over the help line.

GCash also introduced several innovations in 2019 to further drive engagement, bring more

financial services to the underserved and unbanked. One such innovation is GSave, a digital

savings account that can be opened straight from the GCash app. Not only does GSave allow

first time depositors to participate in the formal banking segment, it also provides a very

competitive offer with interest rate of up to 4% interest per annum, with no minimum initial

deposit or maintaining balance requirement. GCash also launched GCash Forest, an exciting

“green” feature on the app that taps the interest in social causes among its users.

GCash Forest allows users to collect green energy earned from cashless transactions

and enables them to plant virtual trees that will have real life counterparts. As of end-

December of 2019, total GCash Forest users reached 1.7 million. With Alibaba Cloud’s

solutions in place, GCash never had to worry if its system could handle the increase in traffic.

The partnership empowered GCash with the ability to scale infrastructure real-time. This

paid off last year when the COVID-19 pandemic disrupted the global economy. GCash

became a lifeline to many Filipinos. Its registered users has grown to over 33 million at end

of 2020, 65 percent higher compared to 20 million users recorded at end of 2019.

Being the preferred mobile wallet in the Philippines, GCash exceeded its targets last

year with transaction value hitting over P trillion, peaking at a P7.5 billion daily gross

transaction value, and with more than 6 million transactions in a day. Transactions include
cash-ins, payments, banking, and money transfer, among others. The mobile wallet company

also grew its users to 33 million, a 65% growth versus last year.

Last January, GCash received $175 million in fresh capital investment from Bow

Wave Capital Management to further spur the growth of financial inclusion and the

digitization of payments and financial services in the Philippines.

Conclusion

It is true that Mobile payments could encompass the needs of everyday life. As such,

they sought to create a new GCash that provided easier and more accessible financial

services for everyone, so that people can focus on the things that matter to them. The year

2020 has been a year full of challenges, with the world still reeling from the effects of the

COVID-19 economically. In the Philippines, consumers have adjusted to the new normal by

adopting, among others, fintech services to make their financial lifestyles more convenient

and themselves safe against the pandemic.

Dedicated in its commitment in democratizing payments, GCash, the undisputed

leader and preferred mobile wallet in the Philippines, shares how Filipinos have embraced

digital finance through a snapshot of its performance this year. The Bangko Sentral ng

Pilipinas announced their Digital Transformation Roadmap, where the agency aims to shift at

least 50 percent of retail payment transactions to digital, and to have at least 70 percent of

Filipinos have their own e-wallet by 2023.

GCash fully supports this endeavor, and is confident that it will be able to accelerate

meeting this goal, as 1 in 3 Filipinos already have a GCash account.  The BSP also aims to

convert the country into a coinless society by 2025 and to double the percentage of Filipino

adults with bank accounts to 70 percent by 2023.

Rosendo, J. (2019). Industry Study of Electronic Money. University of the Philippines, Dil.

QC.

Globe Telecom Press Release. (2020). Globe Press Release for 2019 updates.

GSMA (2021). Mobile Money for the unbanked. The Philippine Setting.