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PhilStar Business

The price of inclusion

Eleven years ago, I stood before an audience at the Microfinance Council of the Philippines Annual Conference and made the case for electronic payments as a driver of inclusive growth.

Context & Analysis

The microfinance angle matters because these institutions sit close to low-income households and microentrepreneurs, where cash still dominates daily transactions. Electronic payments have moved from a niche idea to a practical route for reaching customers who may not have full bank accounts but use mobile wallets, prepaid cards, or digital bank accounts. For Philippine businesses, that shift can matter in payroll, supplier settlements, remittance receipt, and merchant collections. It can also improve recordkeeping, making small firms more visible to lenders and suppliers.

The “price” in the headline points to costs often overlooked when celebrating inclusion. Expanding payments beyond big cities requires reliable connectivity, affordable devices, customer education, fraud controls, and interoperability across wallets, banks, telcos, and merchants. Regulators such as the Bangko Sentral ng Pilipinas have worked to strengthen real-time rails and standards so transfers between different providers can happen smoothly. Yet inclusion is not automatic: users may face fees, limited support, weak dispute resolution, or privacy concerns. Businesses also must adapt systems and manage compliance, cybersecurity, and data protection obligations.

The next milestone is less about launching another wallet and more about making the ecosystem dependable for everyday use. Watch how well QR payments work across different providers, whether digital banks and e-money issuers can serve rural customers without excessive costs, and how regulators address fraud, data misuse, and consumer redress. If electronic payments become cheap enough, trusted enough, and available beyond metro areas, they could help turn financial access into actual economic participation for households and microenterprises that have long been squeezed by cash-based systems.

Analysis by IJE Software — original commentary on the story above.

This is an excerpt. Read the full article at the original source:

Source: philstar.com

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