Infrastructure: The next frontier of Philippine fintech

By Ray Alimurung and Raya Buensuceso

IN 2026, the Philippines has no shortage of fintech. We have e-wallets on 70% of phones, credit being offered from every corner of the internet, and a growing ecosystem of digital banks, payment providers, and remittance companies. Yet if you sit with any SME bookkeeper, any loan officer, or any ordinary consumer trying to transact seamlessly, a set of persistent conundrums quickly surfaces.

Why are post-dated checks, screenshots of bank transfers, and manual reconciliation still so common? Why are consumer and MSME interest rates still sky-high despite the explosion of lending apps? Why does onboarding still require multiple IDs and repeated KYC across institutions? Why is it easy to open a wallet but still harder to open and use a full bank account? And even with QR PH and InstaPay, why does cash still dominate large parts of commerce?

The temptation is to blame culture or “Filipino habits.” But these are not cultural puzzles. Rather, they are outcomes of insufficient infrastructure.

The simplest explanation is that Philippine fintech has grown top-heavy: strong applications built on weak rails. Our app layer, which encompasses e-wallets, digital lenders, remittance apps, and merchant payment tools, has scaled faster than the shared infrastructure that makes financial services cheap, reliable, and durable. In mature systems, identity is portable, bank account opening is low-cost, payments are near-free, and data can move with consent. Those are not nice-to-haves; they are the margin levers of financial services.

Consider the first puzzle of screenshots, PDCs, and reconciliation. These are not preferences, but workarounds for payments that remain costly, inconsistent, or hard to automate at the edges. When settlement is not free and programmable — when direct debit is not ubiquitous, when standards vary, when integrations are brittle — businesses retreat to what is enforceable and auditable. Checks become a control system, screenshots become a proxy receipt, and manual reconciliation becomes the operating system of commerce.

The second puzzle — persistently high interest rates — follows the same logic. Lending is governed by arithmetic: interest income must cover losses, cost of capital, operating expense, and acquisition cost. In the Philippines, losses and operating costs remain structurally high because underwriting still happens in the dark. Credit data is fragmented, fraud signals are not shared, and identity is costly to verify and easy to work around. When lenders cannot reliably distinguish good borrowers from risky ones, pricing rises across the board, and access remains narrow even as apps proliferate.

The third puzzle — repeated KYC and multiple IDs — reflects the absence of a universally trusted, reusable identity layer. Without a clean anchor and interoperable verification standards, each institution rebuilds trust from scratch. The result is duplication everywhere: duplicated onboarding cost, duplicated friction for users, duplicated exposure to fraud.

The fourth puzzle — wallets are easy, bank accounts are harder — reveals an incentive gap. E-money can scale without the same compliance and balance sheet burdens of banking. Basic deposit accounts, meanwhile, are often uneconomic for private banks: small balances, low transaction volumes, fixed compliance costs. Inclusion does not happen because a product exists; it happens when the economics make it viable, or when policy deliberately offsets the cost.

Finally, the persistence of cash, even with QR PH and InstaPay, reflects the cost and depth of rails. If digital payments cost 1-2% (or more) and lack features that support real commerce, including subscriptions, automated settlement, rich dispute resolution, then cash remains the rational default.

This is why the next phase of Philippine fintech is not merely about more apps. At Kaya Founders, we believe that it should be infrastructure: identity that is portable, banking that is accessible and low-cost, payments that are cheap and programmable, and data that can move securely with consent. Other markets have shown what coordinated rails can unlock: India with Aadhaar and UPI, Brazil with Pix, and regional systems that paired public rule-setting with private execution.

The lesson is not to replicate another country’s model wholesale, but to recognize that the constraints we face are neither intractable nor unique. If we want lower rates, less paperwork, deeper inclusion, and less cash dependency, we should stop treating these as behavioral quirks — and start treating them as infrastructure priorities.

Kaya Founders is an early-stage venture capital firm formed through a partnership of seasoned entrepreneurs and operators: Paulo Campos, Lisa Gokongwei-Cheng, Ray Alimurung, and Constantin Robertz. It builds and invests in foundational technology companies addressing structural challenges in the Philippines and Southeast Asia. Since its founding in 2021, it has raised $30 million in assets under management and invested in more than 40 portfolio companies across fintech, e-commerce, healthcare, agritech, and more.

Ray Alimurung is a general partner at Kaya Founders who manages the Zero to One Fund. He has 14 years of consumer internet and e-commerce experience, most recently as the CEO of Lazada Philippines. Raya Buensuceso is the managing director of Kaya Founders. As employee No. 1, she has built the foundations of Kaya from the ground up. She graduated from Princeton University with a Bachelor’s degree in economics and was featured on Forbes 30 Under 30 List in 2025.