Updated: February 17, 2025 by Michael Kahn. Published: February 17, 2025.
In recent years, the Philippines has emerged as a notable digital money success story, with much of the population having adopted cashless payments for a growing proportion of regular purchases. This is even more remarkable considering that, before the COVID-19 lockdowns of 2020, most Filipinos were wary of cash alternatives and, to an extent, mainstream banking services.
Today, however, Filipinos are among the world’s most committed e-wallet users, with a majority having used them at least once in the past month. The market’s trust in these apps also continues to grow, with e-wallet adoption and usage frequency both expected to continue rising over the next few years.
Another trend that has grown alongside e-wallets is digital banks, a new generation of banking services that offer similar services as traditional banks but exclusively through digital banking applications. In day-to-day use, both digital banks and e-wallets offer similar advantages, both being quick and convenient ways to purchase goods and services. However, a digital bank will generally offer a much broader range of financial services compared to even the most accepted digital wallets. Let’s look at the key differences in detail.
1. Acceptance
In the Philippines, e-wallets are widely accepted for common transactions, such as paying bills, buying groceries, and making in-store or online purchases. However, despite their increasing usage, they aren’t yet widely used for larger, more formal transactions. On the other hand, digital banks enjoy close to universal acceptance for transactions of all types and sizes.
2. Savings and Investment Features
Even though you can save millions of pesos in e-wallets, e-wallet users who do not also have a bank account are still considered “unbanked.” This is because, in contrast to both traditional and digital banks, e-wallets do not offer interest on savings or access to meaningful investments. While both e-wallets and digital bank accounts offer payment convenience, the latter is a much better tool for wealth building.
3. Integration with Other Financial Accounts
Digital banks generally allow users to link savings accounts to credit or debit cards as well as e-wallets. In addition, many facilitate direct deposits, and help account holders take out and manage loans. E-wallets can usually be linked to a bank account or card for reloading funds, but their integration capabilities tend to be more limited compared to digital banks.
4. Security
These days, both e-wallets and digital banks employ significant security measures, with two-factor authentication, encryption, and transaction notifications now standard for both. However, as a whole, digital banks often have more stringent security protocols, similar to what you would expect from traditional banks. In fact, there are now digital banks like Maya that are supervised by the Bangko Sentral ng Pilipinas or BSP.
5. Perks for Account Holders
Popular e-wallets may offer perks like discounts or exclusive deals with partner merchants. Digital banks sometimes offer these perks as well, but their focus tends to be more long-term through offerings like higher interest rates on savings, reward programs tied to credit cards, and personalized financial advice.
6. Account Requirements
E-wallets typically have fewer requirements for account creation compared to digital banks, though this has started to change in recent years thanks to know your customer (KYC) regulations. Even then, many e-wallets only require a valid phone number, making them accessible even to individuals without formal identification. Digital banks, on the other hand, tend to require government-issued IDs, photos, and additional documentation for account verification, much like traditional banks.
7. Transaction Limits
With a few isolated exceptions, e-wallets typically have lower transaction and balance limits compared to digital bank accounts, largely to help protect the wallet operator against massive coordinated withdrawals by account holders. While not all digital bank accounts have high transaction limits, most long-time account holders and verified users can qualify for higher limits later on.
8. Regulatory Oversight
Though e-wallets are subject to some government oversight in the Philippines, digital banks are subject to stricter regulatory requirements and are backed by deposit insurance through the Philippine Deposit Insurance Corporation. For the most part, e-wallets lack deposit insurance, making them significantly less secure for storing large sums of money.
9. Overseas Usability
Lastly, mainstream digital banks handily beat e-wallets for international transactions. Most e-wallets generally focus on domestic payments and support for cross-border transactions or foreign currency accounts is generally limited. If you travel internationally, a digital bank account will probably be far more useful.
Which One Do You Really Need?
There’s nothing wrong with having both an e-wallet and a digital bank account. In fact, most Filipinos now have multiple digital bank accounts and link their e-wallets to their mobile provider, ridesharing services, and online shopping apps. Maya, in particular, is both a digital bank and an e-wallet, which provides greater convenience.
Still, with all of those differences in mind, one thing becomes clear. Where e-wallets are tools to help you make faster transactions, digital bank accounts offer a broader and deeper approach to financial management. Look at it this way: e-wallets do make it easier to buy things but you need a bank account to effectively grow your personal wealth.
Thanks to the emergence of better digital banking services, e-wallet users who have yet to be banked will not feel lost when transitioning to real digital banking. With Philippine digital banks now offering some of the highest interest rates in the market, e-wallet users should consider making the leap very soon.
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Whether she is researching the latest trends in home decor, life-changing destination getaways, or the best way to maintain your finances, Dewey takes pride in leaving no stone unturned. She is passionate about distilling and delivering high-quality information that you can use to upgrade your life.
