GCash's Martha Sazon: “We became profitable three years ahead of target”

No other company embodies Philippines’ rapid adoption of digital services and the growth of its internet economy better than Mynt, operator of the country’s leading payment and finance app, GCash.

Consider this, the mobile wallet provider now serves about 83% of the population, some 60 million Filipinos - almost three times of the number at the start of 2020. In 2021, it processed PHP 3.8 trillion ($68 billion) in gross transaction value (GTV) —again triple the total of the previous year, of PHP 1.2 trillion ($21 billion). Mynt attributed the increase to the growing relevance of Gcash in the everyday lives of Filipinos resulting in an exponential growth in user base and usage. 

To put it into context, $68 billion is over 17% of the $394 billion gross domestic product (GDP) of the Philippines in 2021. It is more than twice the IDR 461.6 billion ($30.8 billion) GTV reported by Indonesian super app, GoTo, which witnessed a 40% year-on-year (YoY) growth.

And to top that, in March 2022, GCash’s monthly GTV reportedly crossed the PHP 500 billion ($8.95 billion) mark. At this rate, it will end the year with an annual GTV of over PHP 5 trillion ($89.5 billion). It has already five times more users than the next largest mobile wallet, and they log in and transact an average of 29 million and 19 million times respectively every day.   

GCash serves millions of Filipinos with its digital ecosystem and claims to be the country’s first duacorn, “double-unicorn”, when it raised $300 million in a funding round in November 2021 that valued the Globe Telecom (Globe) owned company at $2 billion.  It added new global private equity and venture capital investors such as Warburg Pincus, Insight Partners, Amplo Ventures, Itai Tsiddon to its current stable of backers like Globe, Ayala Corp and Bow Wave Capital.

COVID-19 disruptions drive exponential growth in digital services and internet economy

COVID-19 has exacted a significant toll on the economy and livelihood, with almost 3.3 million Filipinos unemployed, and 26% of businesses closed. It has however also dramatically accelerated the digitalisation of everyday lives and lifestyles, which Mynt, and GCash in particular, appear to be benefiting from as it experiences an unprecedented growth spurt during the period.

At the same time, it leveraged its digital platform to provide a safe and efficient distribution channel for pandemic relief support -- disbursing over PHP 16.3 billion ($295.96 million) worth of aid to 2.4 million Filipino beneficiaries in just a few days.

Martha Sazon,

President and CEO,

Mynt and GCash

Martha Sazon, president and CEO of Mynt and GCash, remarked that despite the disruptions to the economy and livelihood, the pandemic sped up the adoption of digital services, and growth of the internet economy.

To capitalise on the shift, Mynt has had to ensure that it is able to scale sustainably, to serve the surge of customers while keeping costs low. At the same time to continue to innovate and disrupt financial services in the Philippines by ensuring it has the necessary technological capacity and skills to do so.

Financial inclusion remains an issue with about 63% of Filipinos without formal banking accounts, of which 26% not even having physical access to a bank. GCash initiated its vision of “finance for all” to overcome this.

Ensuring technological infrastructure’s ability to support growth

Mynt partnered with Amazon Web Services (AWS) to ensure that its technological infrastructure is able to support the anticipated growth.

Sazon elaborated, “We started working with AWS when one of our major shareholders, Globe, adopted a cloud-first policy back in 2014. It made sense for GCash to leverage this partnership, benefiting from economies of scale, and ecosystem support. So, GCash’s entire infrastructure is in the cloud. The migration to the cloud has allowed us to increase agility, deliver scalable and reliable platforms while keeping our costs down. it also means that we can devote more time and resources to delivering new game-changing products that are relevant to the Filipino consumer”.

Sazon herself joined Mynt in June 2020 in the middle of the pandemic, after a 13-year stint in Globe where she managed different businesses and specialised in turnaround and transformation. In total, she spent more than two decades in marketing and general management in different industries from fast-moving consumer goods (FMCG), personal care, over-the-counter (OTC), and telco before fintech now.

Gcash achieved profitability three years ahead of target

Sazon credited AWS for helping to optimise GCash’s cloud spending. Its enterprise level support leverages cloud architecture framework, comprising AWS Solution Architects and AWS Professional Services, enabled Gcash to save approximately $3.8 million in 2021. It lowered cloud costs and helped the company to profitability in 2021, three years earlier than projected. 

However, she emphasised, “Our focus really is not on profitability, but in growing businesses we're here to do, especially in the lending space, and if it means sacrificing our profitability in the near future to scale up further, we will do that. Our focus is really to grow the use cases, to tap even more underserved and unbanked Filipinos and to prepare for the future of GCash”.

Mynt however did not disclose exact profitability numbers for GCash. In its latest briefings and press releases, the company shared that GCash reached positive full year earnings before interest, taxes, depreciation, and amortisation (EBITDA) and it was driven primarily by the app’s pervasiveness and scale, optimised monetisation and cost-management.

Manage and deploy applications more efficiently

Amazon Elastic Kubernetes Service (EKS), managed container service, and Amazon EC2 Spot Instances on-demand computing capacity, also helped Mynt manage and deploy applications more efficiently.

Conor McNamara,

ASEAN Managing Director,

AWS

Conor McNamara, AWS’ managing director for ASEAN explained, “We try to work closely to ensure that we're giving forward looking best practice architecture advice to customers, to ensure that they can realise the architecture best practices aligned to that workload. And that could be for example, as Mynt has done, moving on to EKS or container offering or taking advantage of Lambda or to move proprietary licence onto Aurora, to look at architecting a particular application across multiple availability zones for high availability. So that's all part of our approach.”

Mynt worked with AWS on some of its innovation projects. In 2021, GCash launched various product features – from its new buy now, pay later (BNPL) product “GGives”, to a micro small and medium sized enterprise (MSME) solution called “GCash Po”, collaborating with various AWS independent software vendor (ISV) Partners. 

Its GSave savings account now has 5.3 million depositors. Its investment marketplace, GInvest, has three million registered users representing 77% of the unit investment trust fund (UITF) accounts in the Philippines.

GCredit, GCash’s digital lending business has already provided PHP 29 billion ($518 million) worth of credit lines to qualified users since its launch in 2018, while quick cash loan platform, GLoan, has handed out PHP 2.2 billion ($39 million) worth of loans in just ten months of operations.

It also partnered AWS to improve internal processes. Through UiPath robotic process automation on Amazon Workspaces, Mynt automated its finance processes, achieving about 85% improvement in processing time for financial reconciliation, prefunding and settlement, which reduced about 2,600 man-hours per month by automating repetitive manual tasks

A cutting-edge customer

In terms of new services adoption, McNamara considers Mynt a cutting-edge customer. “We are a cutting edge technology, and Mynt always has appetite for new services, whether it's in the area of new computing offerings like Lambda, event driven computing, or container offerings like EKS, machine learning (ML) and artificial intelligence (AI).

AWS also enabled Mynt to strengthen technology practice with training and education programmes, which saw the certification of 46 AWS practitioners and 40 AWS technical trainees in 2021

McNamara remarked, “Training and upskilling is a big factor. We'll continue to invest aggressively in training and certifications and ensure we continue to build that cloud fluency with a focus on operational excellence.”