The Philippines has witnessed a financial revolution in the past decade. Once defined by lengthy bank lines and tedious paperwork, the domestic economy now runs on digital rails. Gone are the days when you had to use your credit card or physically pay for transactions in cash. Even paying for train rides has become very convenient using mobile digital wallets.

Electronic Money Issuers (EMIs) have been at the forefront of the financial revolution. Platforms such as GCash and Maya have revolutionized how Filipinos transact, enabling millions of previously unbanked citizens to access formal financial services. By 2021, e-money accounts became the most widely held financial account type in the country. This progress was not driven by traditional banks, but mainly by EMIs that built accessible, affordable platforms for everyday Filipinos. Today, sari-sari store owners, tricycle drivers, market vendors, and rural families transact seamlessly through their mobile phones.

Yet, this monumental momentum faces a critical structural test. The Bangko Sentral ng Pilipinas (BSP) recently released Circular No. 1238, alongside BSP Memorandum No. M-2026-026, aiming to enhance the pricing mechanisms under the National Retail Payment System (NRPS) Framework. While the central bank's goals of consumer protection, fairness, and transparency are entirely commendable and fully supported by EMIs, a closer look at the regulatory implementation reveals an unintended threat to the very ecosystem that democratized Philippine banking.

For fintechs, the ongoing debate over the BSP circular should not focus on whether transfer fees should be lower or even zero. It should becentered on whether regulation can protect consumers while preserving a payments ecosystem that is secure, competitive, innovative, and financially sustainable over the long term.

The manner of implementation will be a critical concern. Any pricing framework must reflect the market's actual economics, especially the structural differences among banks, digital banks, and e-money issuers or wallet-based providers. For fintechs and EMIs, off-us transfers involve more than switch fees. They also require spending on fraud controls, AML compliance, cybersecurity, liquidity management, reconciliation, customer support, and continuous systems development.

If regulation compresses transaction-linked revenues without regard to those costs, the likely result is not stronger consumer protection but weaker service quality, less innovation, reduced competition, and possible market exit by smaller players. In that scenario, consumers may pay less per transaction today, but receive a less resilient and less inclusive payments system tomorrow.

Traditional banks generally operate with broader balance sheets and more diversified revenue streams. EMIs and wallet-based providers do not. They depend more heavily on payment-related revenues and, because e-money balances must be safeguarded under BSP rules, they cannot deploy customer funds the way banks use deposits for lending and other balance-sheet income. That distinction matters. “Fair pricing” cannot mean assuming that all institutions have the same cost base, risk profile, and revenue model when they plainly do not.

EMIs have materially expanded access to formal financial services, especially for underserved communities. Digital wallets have helped millions of previously unbanked or underbanked Filipinos receive remittances, pay bills, access government aid, and participate in the formal economy. Their importance became especially clear during the pandemic, when digital payments served as a practical financial lifeline.

Today, Fintech is no longer a marginal channel. It is now a meaningful part of the country’s financial and inclusion infrastructure. Registered e-money accounts rose from 171 million in 2021 to 258 million in 2022, an increase of 86 million users. The share of Filipinos with formal accounts increased from 29 percent in 2019 to 56 percent in 2021, with e-money accounts the most-owned account type at 36 percent. Digital retail payments volume grew from 14 percent in 2019 to 52.8 percent in 2023.

These figures matter because they show that fintech and e-money providers are already delivering scale, access, and usage at a level relevant to national policy. Any implementation of Circular 1238 should therefore be evaluated not only for its effect on headline fees, but also for its effect on the sustainability of a sector that has already expanded inclusion and digital adoption at scale.

The industry is not asking to abandon the BSP’s policy direction. It is asking for implementation that is evidence-based, proportionate, and institution-sensitive. It also seeks a pricing review grounded in full-cost realities and institution-specific evidence, along with a phased implementation period of about 12 months to allow adjustments informed by market data and operational experience.

The issue is not whether fees should be fair, but whether pricing rules reflect the full cost realities of different types of institutions. Consumer welfare is not just about zero fees today; it is also about reliability, fraud protection, resilience, and continued innovation tomorrow. Banks and fintechs do not operate on identical economics, so a single pricing assumption can produce unequal effects. The best regulatory outcome is one that keeps payments affordable while preserving sustainable participation and long-term financial inclusion.

Financial inclusion cannot thrive on a broken business model. To keep millions of Filipinos plugged into the formal economy, the country needs a fintech ecosystem that is not just affordable, but commercially sustainable enough to keep innovating, securing, and growing.

The author is an Executive Member of the National Innovation Council and Lead Convener of the Alliance for Technology Innovators for the Nation (ATIN). [email protected]