Maya's Transfer Fee Strategy: A Calculated Decision Amid Fee-Free Competition

While free bank transfers are becoming increasingly common, Maya has chosen to maintain its transfer fee for the time being.

The Bangko Sentral ng Pilipinas (BSP) has been actively working to make digital transactions more affordable, encouraging Filipinos to reduce their reliance on cash. Recently, the BSP issued Circular No. 1238, which mandates that electronic fund transfer charges be aligned with actual costs.

In response, nearly all universal and commercial banks have swiftly moved to eliminate fees for InstaPay and PESONet transfers for individual customers, effectively taking action by July 24. However, fintech companies like Maya have been slower to adapt.

In July, Maya reduced its InstaPay transfer fee from P15 to P10 but stopped short of eliminating it altogether. In contrast, competitors such as GCash and GrabPay continue to apply their own fees.

When asked about the hesitance to completely scrap the fee, Jinggay Nograles, head of investor relations at PLDT, which has historically worked with Maya, highlighted the structural differences between traditional banks and fintech firms. "The cost structure of a bank versus a digital financial platform like Maya is quite different," Nograles explained during an interview.

Economic Considerations

Maya is not just a standard digital bank; its ecosystem encompasses a broad array of services including consumer wallets, merchant acquiring, payments, lending, and banking. This diversity comes with its own set of costs related to technology and infrastructure development. Traditional banks, on the other hand, typically have established revenue streams and customer bases developed over many years.

For Maya, the P10 transfer fee represents more than a minor cost adjustment. According to Nograles, transfer fees still play a significant role in the company's revenue generation. Since achieving profitability just last year, and with an IPO on the horizon, maintaining this revenue stream is essential. "Maya needs to be a going concern," she stressed, emphasizing that this fee structure helps ensure financial stability.

Interestingly, PLDT sees Maya as compliant with BSP's Circular No. 1238. The regulations do not mandate eliminating transfer fees but instead encourage cost-based pricing, which Maya appears to be implementing.

"So, they're complying with BSP," Nograles stated, noting that the action taken by other banks exceeds the regulatory requirements.

It's essential to remember that Maya’s roots trace back to PLDT's digital innovation arm, Voyager Innovations. Even as Maya has evolved and now retains less than half of PLDT's ownership, the historical ties between the two remain strong. PLDT controls about 40% of Maya Innovations Holdings today. PLDT chairman Manuel V. Pangilinan also serves as chairman of Maya, maintaining input on its strategic directions, including profitability efforts and competitive positioning against rivals like GCash.

Regulatory Scrutiny and Industry Response

Maya itself has been relatively quiet on this matter, stating, "As requested by the BSP, Maya has already submitted the required position on Circular No. 1238. We have no further comment at this time," in a recent communication.

However, industry groups such as the Digital Bank Association of the Philippines (DiBA PH) have welcomed the BSP's clarification that its new circular operates on a cost-based framework rather than mandating zero fees. Maya Bank, as a member, stands to benefit from this understanding.

The FinTech Alliance PH has echoed similar sentiments, arguing that financial service providers need to recover legitimate operational costs. Maya's representation in these groups suggests a collaborative effort to frame the conversation surrounding transfer fees.

This clarification from the BSP provides a level of support for Maya in justifying its ongoing fees, though it doesn't settle the question of whether the P10 charge is appropriate.

Deputy Governor Mamerto Tangonan has emphasized that the BSP will continue to review submissions from Maya, GCash, and other financial institutions to understand the underlying costs of their fees. As of the end of July, discussions about these practices are ongoing.

It seems Maya's P10 fee will remain unless regulatory action dictates otherwise. For now, maintaining this fee aligns with business logic for Maya, a fintech player still in its growth phase.