IDfy and Mastercard roundtable identifies onboarding automation, fraud prevention and alternative data as key priorities
Manila, Philippines — Philippine financial institutions need to modernize the way they onboard, monitor and assess small businesses if the country is to fully realize the growth potential of its micro, small and medium enterprise (MSME) sector, industry leaders said.
Executives from banking, fintech and payments gathered at The Anatomy of Merchant Trust, an executive roundtable co-hosted by IDfy and Mastercard in Manila, to discuss how the financial sector can make merchant ecosystems more secure while reducing barriers for legitimate businesses.
The conversation comes as digital payment adoption continues to accelerate. Bangko Sentral ng Pilipinas (BSP) data shows that QR Ph adoption has surpassed 57 percent.
Yet the growth of digital payments has also exposed a gap in the infrastructure supporting small merchants.
Many micro-enterprises continue to face fragmented verification processes and limited access to formal business records and credit histories. For financial institutions, the lack of reliable merchant-level information can increase risk uncertainty and lead to broad controls that may unintentionally exclude legitimate businesses.
Industry leaders said the solution is not simply to lower risk requirements, but to make risk assessment more intelligent.
Automated, risk-based verification can help institutions move away from legacy paper checks and physical audits, allowing them to distinguish more effectively between legitimate merchants and higher-risk cases.
During the roundtable, participating executives ranked business document verification and compliance checks as the top workflow for automation, with a score of 4.4 out of 5.
This modernization could also complement government efforts to bring more small businesses into the digital economy. The DTI’s Tindahan Mo, e-Level Up Mo! initiative, for example, has helped thousands of small merchants gain digital literacy and adopt cashless payment tools.
But onboarding is only one part of the trust equation.
As merchants become increasingly digital, institutions also need to protect them throughout the relationship. Continuous fraud monitoring and real-time behavioral analytics can help identify document forgery, deepfakes and post-approval misuse while keeping friction low for legitimate businesses.
“Merchant trust is no longer a one-time verification exercise—it is a continuous lifecycle,” said Raghuraman Chandrashekhar, PH Country Head of IDfy. “As digital payments scale across the Philippines, institutions must move away from fragmented onboarding and adopt intelligent, risk-based systems that unify identity verification, alternative data, and real-time monitoring. The future of financial inclusion depends on enabling MSMEs to be onboarded quickly and safely at scale.”
The discussion also highlighted the role of alternative data in expanding credit access. Digital payment records, utility payments and transaction footprints can help lenders build a more complete picture of merchants that lack traditional credit histories.
When paired with progressive lending models, this approach could potentially unlock formal financing for more than one million underserved merchants nationwide.
“Merchant trust extends well beyond onboarding. As more businesses participate in the digital economy, the industry needs to strengthen collaboration across banks, payment providers, fintechs, and technology stakeholders,” said Jason Crasto, Mastercard’s Country Manager for the Philippines. “Each stakeholder brings unique capabilities, perspectives, and expertise to the table. Through stronger public-private collaboration, shared intelligence, and advanced risk solutions, we can build a more secure, scalable, and inclusive digital ecosystem that empowers Philippine MSMEs to grow with confidence.”
The roundtable ultimately pointed to a common priority: making trust infrastructure work better for both financial institutions and the businesses they serve.
By combining faster verification, continuous fraud intelligence and broader data for credit assessment, industry leaders believe the Philippines can create a financial ecosystem where more legitimate MSMEs can participate, access capital and grow securely.
For more information on the roundtable discussion, visit www.idfy.ph.