Maya: Why a Payments Company Went and Got a Bank Licence

The wallet-versus-bank decision is the most consequential structural choice in Philippine fintech. This story covers the payments origins, merchant acquiring, the digital bank licence, deposit funding, lending, capital requirements, competition and the path to profitability — part of the Philippines Company Stories hub.

What was the payments origin?

A business providing card acceptance and digital payment infrastructure to merchants, alongside a consumer wallet, built within a larger telecommunications and infrastructure group.

Merchant acquiring gave it a different starting position from a purely consumer wallet: relationships with businesses, transaction data on the seller side and a revenue stream from processing.

That two-sided position — consumers and merchants — is more defensible than either alone, since each side makes the other more valuable.

What is the difference between a wallet and a bank?

An electronic money issuer holds customer funds in trust accounts at licensed banks, cannot lend them and earns only fees and whatever the trust accounts pay.

A bank takes deposits as liabilities on its own balance sheet and lends them, earning the spread between deposit cost and lending yield, which is the fundamental banking business model.

For a fintech with millions of customers holding balances, converting those balances from trust funds into deposits is the single largest available improvement in economics.

What are digital banking licences?

A category created by the central bank permitting banks to operate without physical branches, serving customers entirely through digital channels under full prudential supervision.

A limited number were issued, deliberately, to allow the regulator to observe how the model performed before expanding the category.

They carry the same capital, liquidity, governance and reporting requirements as conventional banks, which is the point: the delivery channel differs, the prudential standard does not.

How do digital banks attract deposits?

Through interest rates well above what incumbent banks pay on savings, made possible by having no branch network to fund.

Deposit insurance coverage makes the proposition credible to customers who would otherwise be reluctant to hold money at an institution with no physical presence.

The strategy works and is expensive: paying high rates to acquire deposits only makes sense if those deposits fund lending at a substantially higher yield.

What does the lending book look like?

Consumer credit — small loans, buy-now-pay-later, credit lines — underwritten using transaction data from the wallet and merchant network rather than from credit bureau files.

Merchant lending is the other side: working capital advances to businesses using the payments product, repaid from their transaction flows.

Both depend on data the institution generates itself, which is the structural advantage a payments company brings to lending.

Why is credit quality the whole question?

Because lending at scale to customers with no formal credit history is either the largest opportunity in Philippine financial services or the most expensive mistake, and the difference is underwriting.

Digital lenders across Asia have grown loan books rapidly and then discovered loss rates well above model predictions when conditions changed.

The honest position is that no Philippine digital lender has yet been through a full economic cycle, so the models are untested where it matters most.

What are the capital requirements?

Minimum capital set by the regulator, plus capital held against risk-weighted assets, which means every peso lent consumes capital the shareholders must provide.

A digital bank growing its loan book quickly therefore requires repeated capital injections until it becomes profitable enough to fund growth from earnings.

That is the constraint that determines how fast these institutions can scale, and it is why shareholder commitment matters as much as customer acquisition.

How does merchant acquiring work?

Providing terminals, QR acceptance and online payment processing to businesses, earning a fee on each transaction processed.

Small merchants are the growth segment, and serving them requires cheap hardware, fast onboarding and settlement quick enough to support their cash flow.

The strategic value is data: a merchant’s transaction history is the best available basis for lending to a business with no formal accounts.

What is the competitive position?

Second in consumer wallet scale behind the market leader, stronger in merchant acquiring, and holding a banking licence that the leader has approached differently.

Competition is intense on both sides, with incumbent banks, other digital banks, card networks and the leading wallet all pursuing the same customers.

Differentiation is through the combination of consumer, merchant and banking capability under one owner, which few competitors have assembled.

How does the parent group help?

Through capital, a telecommunications subscriber base for distribution, and the credibility of an established conglomerate in a sector where customers are trusting an unfamiliar institution with money.

Group businesses also provide merchant relationships and transaction volume, which accelerates the acquiring business.

The constraint is the same as for any conglomerate subsidiary: a capital-hungry growth business competes with other group priorities for funding.

What is the fraud and security position?

The same social engineering, phishing and account takeover threats every digital financial provider faces, amplified by a customer base new to digital money.

Prudential supervision imposes formal requirements on controls, incident reporting and customer redress, which raises standards and cost simultaneously.

Trust is the underlying asset: a customer defrauded once may abandon digital finance entirely, which makes prevention a growth investment.

What does profitability require?

A loan book large enough that net interest income exceeds the cost of acquiring deposits and customers, with credit losses within model expectations.

Digital banks worldwide have taken years to reach that point, and several have not, which is why patient shareholders are a structural requirement rather than a preference.

The Philippine opportunity is genuinely large given how underbanked the population is, and size of opportunity has never guaranteed that any particular institution captures it.

What is the lesson?

That regulatory structure determines business model. The same customers, the same application and the same transaction data produce different economics depending on which licence the operator holds.

The second lesson is that lending is where fintech monetizes, and lending is a risk business rather than a technology one, which requires capabilities that payment companies do not naturally have.

The third is that a two-sided position — consumers and merchants — produces data neither side alone would generate, which is the most defensible advantage in the sector.

How does deposit insurance change customer behaviour?

It makes a branchless institution acceptable for meaningful balances, because the customer’s money is protected up to the insured limit regardless of the bank’s condition.

Without it, customers would use a digital bank for transactions and keep savings at an incumbent, which would starve the digital bank of the funding it needs.

It is a clear example of regulation enabling a market rather than constraining it, and it is why the licence category was designed the way it was.

What is buy-now-pay-later’s role?

An acquisition product that introduces customers to credit at the point of purchase, generating data on repayment behaviour that supports larger lending later.

Merchant-funded models charge the seller for higher conversion rather than the customer for credit, which makes the product attractive to consumers and thin-margin for providers.

Loss rates on this product are the leading indicator for a lender’s wider consumer book, since it is the least secured and most easily accumulated form of credit.

How do digital banks control costs?

By operating without branches, automating onboarding and servicing, and building on modern core banking platforms without decades of accumulated legacy systems.

Cost per account is a fraction of an incumbent’s, which is what makes serving small-balance customers viable at all.

The offsetting cost is customer acquisition, which is expensive in a competitive market and is where digital bank economics most often disappoint.

What happens to unprofitable digital banks?

They either raise more capital, narrow their focus to profitable segments, are acquired, or return their licences, all of which have happened in markets that issued them earlier.

Regulators generally prefer consolidation to failure, since a digital bank failing damages confidence in the whole category.

That is why licence numbers were limited deliberately, allowing the regulator to observe the model before expanding it.

What is the enterprise payments business?

Processing payments for large merchants, e-commerce platforms, utilities and government agencies, which generates volume at lower margin than consumer products but with contracted stability.

Enterprise relationships also drive consumer adoption, since customers paying a utility bill through the platform discover the wallet in the process.

Competition here is against banks and specialist processors, and it is won on reliability, settlement speed and integration quality rather than on price alone.

What does the competitive endgame look like?

Probably two or three scaled players combining wallet, merchant acceptance and a banking licence, with smaller entrants either specializing or being acquired.

Incumbent banks will retain higher-balance customers and corporate relationships while ceding the mass transactional market they never served profitably.

The unresolved question is whether the market can support more than one profitable digital bank, which no comparable market has yet demonstrated.

How does customer acquisition actually work?

Through cashback promotions, referral incentives, merchant partnerships and distribution via the parent group’s telecommunications subscriber base.

Promotional acquisition is expensive and attracts users who optimize for incentives, so the metric that matters is what proportion remain active once promotions end.

Cheaper acquisition comes from utility: a customer who uses the wallet because their landlord, employer or favourite merchant accepts it costs nothing to retain.

How do regulators supervise digital banks?

Through the same prudential framework applied to conventional banks: capital adequacy, liquidity coverage, governance standards, risk management requirements and regular reporting and examination.

Additional attention goes to technology risk, cybersecurity and operational resilience, since a branchless bank whose systems fail has no alternative channel to serve customers.

Consumer protection oversight is also heavier, given that the customer base includes many people using formal financial services for the first time.

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