The Philippines Growth Dialogues: Martha Sazon

Martha Sazon is president and chief executive officer of GCash. Founded in 2004, GCash provides digital payments and financial services. As of May, it had more than 60 million users, or more than 80 percent of the adult population, making it the leader mobile wallet app in the domestic market. In 2021, its valuation reached more than $2 billion and it won the Best Financial Inclusion Initiative/Application from Asian Banker magazine for its work with the Social Amelioration Program, which sends government cash subsidies to low-income families. Prior to joining GCash in June 2020, Sazon was a senior vice president at Globe Telecom, one of the founding joint-venture partners of GCash.

These edited extracts are part of McKinsey’s Philippines Growth Dialogues anthology, which explores the country’s opportunities and challenges as it seeks to build sustainable and inclusive growth.

McKinsey: Filipinos spend a great deal of time on the Internet and we are very active on social media. But in some ways, we lag behind our neighbors. What are the problems and what needs to done to unlock the full potential of the Internet?

Martha Sazon: I don't want to dampen the progress that's been made; Internet penetration has grown to 40 percent or more. But there is still a lot of work to be done. It doesn't help that we are an archipelago, which makes connectivity and laying the groundwork doubly challenging. This results in divided opportunities between urban and rural areas.

Another area of opportunity is financial services. The bank penetration rate is only 30 to 35 percent.1 Credit card penetration is 2 percent. 2 This is important because financial services enable financial freedom, so that you can progress and improve your status. And this is where GCash plays a role—by providing access to banking and democratizing finance.

Beyond everyday payments and transfers, GCash offers savings accounts, credit insurance and investments. By making our digital products more accessible and affordable, we are changing the mindset that financial services are only for the wealthy.

McKinsey: Will fintechs overtake traditional providers?

Martha Sazon: Yes, we are seeing this happening. The pandemic has changed the mindset of people; it made them more digitally familiar and more trusting of the digital platform. Initially, there was skepticism. But then there was a bandwagon effect, driven by word of mouth. In the same way that people bypassed laptops and went straight to smartphones and bypassed emails to go straight to chat groups, digital payments will not only bypass credit cards, but will usher in digital financial services.

McKinsey: What trends are you seeing?

Martha Sazon: Due to the pandemic and quarantine restrictions, we've seen a shift to online behavior in almost all aspects of our daily lives. People needed a contactless way to pay for their essentials, and GCash provided a safe, easy, and secure mode of payment. Second is the rise of the online selling communities. The quarantine resulted in massive unemployment and Filipinos turned to online means like Viber, Facebook, and Instagram selling groups to make a living. GCash provided a way to accept payments and pay their suppliers. We now have more than 1.9 million merchants and social sellers on our platforms; we started with 75,000 last year. Third, young people have become very conscious about their finances and how they navigate financial volatility; they comprise a large portion of the users of the financial services like investment, insurance, and savings that we introduced during the pandemic.

McKinsey: What are some of GCash’s most important innovations?

Martha Sazon: More than the type of innovation is how we made it relevant to people. The bank penetration rate is only 34 percent; the investment rate is just 0.67 percent. So introducing GInvest in our platform and providing access to global funds is an innovation we are very proud of. Before, you needed a private bank, a relationship manager, and millions of pesos to get access to global funds. Now, for as low as $20 (or 1,000 pesos) you can have access, with just a few taps.

Another is insurance, which has single-digit penetration in the Philippines. The thing that we're trying to address is the experience. Normally you need to talk to an agent and go back and forth; it’s a long selling process. But we’ve made it more convenient, while making it more affordable. At one point, we doubled the entire industry's activation rate.

McKinsey: What can regulators do to accelerate financial inclusion?

Martha Sazon: For rural areas, the lack of infrastructure is the biggest hurdle; all you need is a reliable Internet connection in a smartphone to create a GCash account. Upgrading people to a smartphone is a step toward financial inclusion.

The next important step is how to put money into your account. We partner with supermarkets, convenience stores, pawn shops, and mom-and pop-stores where you can cash in or cash out of your wallet. Rural areas especially are much more likely to have one of these outlets than a bank, so we are working with local governments to increase adoption outside urban zones.

Just to share an anecdote. One day I was walking along the beach with my husband and I saw an outrigger boat and they were selling their catch. And I said, “I don't have cash. But do you have GCash?” They said “yes,” and I ended up buying their entire catch. We also see tricycle drivers now accepting GCash, and even market stalls.

1Bangko Sentral ng Pilipinas’ states that in bank penetration in 2021 stood at 37.5 percent of the overall population. (
2According to Findex credit card penetration in the Philippines in 2021 stood at ~5.2% of the overall population. (