Fintech PayMongo Weans Philippines Buys Money Simplifying Digital Payments

Armed with new funding, payments fintech PayMongo is enabling small businesses in the Philippines to join the digital economy.


A A three-year-old Filipino fintech company is helping to digitize the country’s predominantly cash-based economy, one click at a time. Founded in 2019, Manila-based PayMongo has seen its user base and transaction volumes soar by tapping into the country’s vast pool of small merchants – from family-owned shops to independent fashion boutiques – who relied on in-person cash transactions before the pandemic.

Backed by investors including PayPal co-founder Peter Thiel and payments giant Stripe, PayMongo allows sellers to send payment links to customers, who can pay using a range of options, including credit cards and electronic wallets. It’s a “Stripe for the Philippines,” says CEO and co-founder Francis Plaza. Winner of the inaugural Forbes Asia 100 to Watch last year, PayMongo targets small and medium-sized businesses which, along with micro businesses, make up 99.5% of businesses in the Philippines, but remain underserved by traditional payment providers. “Our biggest competitor is traditional payments, like cash,” Plaza said in a video interview in March from Madrid, where he celebrated his 28th birthday.

In February, PayMongo raised $31 million in a Series B round, bringing its total funding to around $46 million. Founded in March 2019, it joined Y Combinator’s summer cohort later that year, becoming the first Filipino fintech to be selected by the US-based startup accelerator. After graduating, he secured $2.7 million in seed funding from San Francisco-based Global Founders Capital, Tinder co-founder Justin Mateen, and Stripe. PayMongo then raised $12 million in a Stripe-led Series A in 2020, after which the company said it tripled its merchant base to over 10,000 businesses and quadrupled monthly transaction volumes. Plaza declined to disclose those numbers.

“Our biggest competitor is traditional payments, like cash.”

Plaza, which is eyeing expansion beyond the Philippine archipelago, credits each funding round with “changing the company’s narrative” by helping it roll out products for e-commerce platforms, such as Shopify and WooCommerce, and mobile apps.

“From the beginning, the biggest misconception that we had to actively educate outside investors on was the reality of the Philippine market,” says Plaza, 2020 Forbes 30 Under 30 Asia winner. they saw the Philippines as a small market,” he recalls, adding that “now they’re the ones saying we should double down in the Philippines. The country was the fastest growing digital market in Southeast Asia. Is in 2021, according to a report by Google, Temasek, and Bain & Co. It projects the Philippines’ internet economy to more than double to $40 billion by 2025, from $17 billion in 2021.

Some of this growth will likely come from increased financial inclusion in a country where around half the population is still unbanked. The government estimates that if only half of Filipino adults had a bank account in 2021, the group nearly doubled in size from 27% in 2020. The country’s latest national financial inclusion strategy aims to introduce digital payments for all communities by 2023. “We need more people who use digital tools in order to further develop the economy,” Plaza says.

He sees the prospect of more people joining the digital economy as a win-win situation for Philippine fintechs, which form a “complementary ecosystem”. To achieve its goal of becoming an industry leader, PayMongo is working with other fintechs, including established e-wallets GCash and Maya, to make online payments more convenient. Prioritizing partnership over competition makes sense for PayMongo, says Sachin Mittal, who heads telecommunications, media and technology research at DBS Bank in Singapore. “It’s important that you work with a market leader who will promote your solution,” says Mittal, referring to GCash, the largest e-wallet in the Philippines with 51 million users as of October 2021.

“We had thousands of businesses requesting the solution overnight.”

A digital payment platform isn’t what Plaza and the other PayMongo co-founders, including chief technology officer Jamie Hing III, chief operating officer Edwin Lacierda, and former chief growth officer Luis Sia, originally had in mind. A computer science graduate from MIT, Plaza met Sia in college through their involvement in computer clubs. Plaza then worked with Hing to develop software at local logistics company QuadX. He and Lacierda, formerly a spokesperson for the late Philippine President Benigno Aquino III, joined forces in 2016 to create a platform for analyzing voting behavior.

Plaza says PayMongo was initially a “side project” of a short-lived software consulting firm he founded in 2018 called 22 Delta Labs. He realized that integrating payments was one of the most difficult tasks for micro, small and medium enterprises, as they had to rely on outsourced software. “Thousands of businesses requested the solution overnight,” says Plaza. “We realized, why don’t we just focus on payments? »

PayMongo now plans to not only expand beyond the Philippines to other Southeast Asian countries, but also expand its remit by becoming a platform for scaling small businesses in the region. By the end of the year, it plans to grow its workforce from 200 to 300 while expanding the range of services it offers to sellers. Last August, PayMongo launched an acceleration program to help small entrepreneurs with a two-month transaction fee waiver on all PayMongo payment channels and free business, finance and technology webinars. The company believes that future initiatives could build on such programs.

Having benefited from Y Combinator’s accelerator program and insights gained from investors and partners, Plaza says PayMongo wants to do the same for other small businesses looking to grow. In addition to providing “a financial infrastructure for everyone,” he says the true measure of PayMongo’s success will be its ability to empower its employees to start their own businesses. “When people who have actually helped us build this look back and say their move to PayMongo was instrumental in helping them succeed in their new business, it’s really that flywheel of more power from start-up, which will eventually develop the [Philippine] economic,” he said.

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