Behind the fees: Why e-wallets and banks play by different rules

E-wallets GCash and Maya trimmed InstaPay fees from PHP 15 to PHP 10—an improvement, but why not zero, like other local traditional banks?

File photo: Some e-wallet apps in PH

Digital banks and e-wallets are different

According to industry sources, digital banks and e-wallets are just structured differently.

In the Philippines, transaction fees remain a key source of revenue for e‑wallets, helping keep them operational, innovative, and competitive.

Traditional banks also have a different revenue source. About 87% of revenues come from loans and deposits, and an average of 13% from fees.

Meanwhile, e-wallets' revenues come from 90% of revenues come from fees and commissions.

Basically, banks can absorb fee cuts because they have other income streams. Wallets will hurt more.

The advisory from GCash

E-wallets also spend heavily to keep cash‑in/cash‑out services running. It is used by about 43% of customers, especially in Visayas, Mindanao, and lower‑income groups. AND, did you know that around a third of those costs are covered by transfer fees, so going zero would cut into the funds that support financial inclusion.

Moreover, it might hurt e-wallets' ability to invest in fraud prevention, compliance, cybersecurity, and innovation. They don't have regulatory advantages (like lower reserve requirements).

If regulators force zero fees too early, insiders noted that investors may also pull back, slowing innovation and financial inclusion.

So, is the PHP 5 reduction still impactful? The answer is yes. 

For example, for frequent users, the savings add up. If someone makes 20 transfers a month, that's PHP 100 saved.

This also shows that e-wallets still respond to BSP's recent call for "reasonable" fees.

Even if not zero, PHP 10 feels more palatable than PHP 15.

Quick thoughts

Wallets can't go to zero because their economics are fundamentally different from banks. Cutting fees too far would weaken the very services that enabled financial inclusion.

The PHP 5 reduction is a very welcome compromise as it eases consumer costs while keeping wallets sustainable enough.