Users of the popular digital payment application GCash faced chaos earlier this week when the app suffered a major failure, making it inaccessible to most from Monday afternoon until about midday on Tuesday. The outage, which was not the first for GCash, simply highlights how, despite a great deal of rhetoric and policy work toward creating a more digitized, cashless society, the Philippines remains far from achieving the same sort of efficiency and convenience that is considered normal in some neighboring countries.
In Taiwan, for example, one of the most popular ways to conduct virtually any sort of ordinary transaction is with the EasyCard, a reloadable digital wallet in card form, similar to the Beep card used here, but with a far wider application. The EasyCard can be used for virtually anything, from paying for transit fares to reloading one's cellular phone, to making purchases at restaurants and shops of any size, even small markets and street vendors.
Mainland China, where both the number of consumers and the vast size of the country make creating and maintaining any kind of digital infrastructure incredibly challenging, has perhaps set the gold standard for cashless business, and has largely dispensed with physical cards as well; QR code-based apps such as Alipay, UnionPay and WeChat Pay are so widely used that in many places, vendors will actually refuse to accept cash. Nor do they need to accept it because the digital payment apps work so well.
These systems are not fundamentally different from those such as GCash and Maya available here, so why do they work so well, and have penetrated the consumer market to such a comprehensive extent that a cash transaction is considered an anachronistic oddity, while the Philippines struggles to do the same?
This could be the subject of an entire roundtable discussion, and that is something we might consider doing in the near future, but in the meantime, there are several problematic areas that would seem to be good places to start working on improvements.
The most obvious problem area is our digital infrastructure. That has been the focus of a great deal of effort on the part of the government and the relevant private sector players in recent years, and it is improving, but far too slowly to keep up with the aspirations for digitalization, or even just the normal growth of digital commerce. Even under normal circumstances, when there are no particular issues with the app of one's choice, it is not uncommon to wait for an extended period of time, or make several attempts before a digital wallet transaction is completed. Accelerating the rollout of new cellular towers and expanding internet coverage is a must, but is still mired in red tape and delays.
As for technical issues with the apps themselves, that might be an area requiring closer monitoring and regulation, but the fact that it is not clear whether it is or not highlights the lack of transparency and effective consumer communication in the industry. Neither GCash, its parent company Mynt, nor Globe Telecom has yet been forthcoming with an acceptable explanation of why an apparent security issue involving just two bank accounts caused the failure of the entire system, and what has been done to correct the issue and prevent it from happening again. A certain amount of business confidentiality and discretion is understandable, of course, but in a situation such as what happened this week, the public and the regulatory authorities who are responsible for safeguarding the public interest need to be assured that the services they depend on are safe and reliable.
And finally, those two problems, as well as inefficient registration procedures, slow the growth of digitalization by discouraging consumers and businesses from using it. Finding ways to increase demand needs to be done in parallel with improving infrastructure and transparency.
With calls for accountability over the latest fiasco involving GCash now coming from Congress, we urge the responsible parties — the Bangko Sentral ng Pilipinas, the Department of Information and Communications Technology, and the service providers — to work together to prioritize ways to ensure reliability and efficiency, even if that means slowing the pace of expansion. Without reliability and efficiency, none of the digitalization goals have any hope of being achieved, and that would be a grave disservice to the Filipino people.
Source: Business World