IDfy and Mastercard roundtable highlights need for smarter onboarding, real-time fraud protection and alternative credit data
Manila, Philippines — As Philippine businesses increasingly move into the digital economy, establishing trust can no longer stop at the point of merchant onboarding, industry leaders said.
Executives from banking, fintech and payments gathered in Manila for The Anatomy of Merchant Trust, an executive roundtable co-hosted by IDfy and Mastercard, to discuss how financial institutions can strengthen merchant verification and fraud protection while creating more opportunities for the country’s micro, small and medium enterprises (MSMEs).
The discussion highlighted a growing disconnect within the digital financial ecosystem. Consumer adoption of digital payment channels such as QR Ph has surpassed 57 percent, according to Bangko Sentral ng Pilipinas (BSP) data, but many small businesses still face significant barriers when attempting to enter and participate in formal digital finance.
For micro and small merchants, identity and business verification can be fragmented, paper-heavy and difficult to scale. Without reliable merchant-level information, institutions may compensate by applying broad risk controls that can make it harder for legitimate businesses to gain access to financial services.
The result is a paradox: businesses that are ready to participate in the digital economy may still be excluded because they lack the documentation or traditional credit history expected by existing systems.
Industry leaders said improving onboarding could help close this gap.
Government initiatives such as the Department of Trade and Industry’s (DTI) Tindahan Mo, e-Level Up Mo! have already helped thousands of small merchants build digital skills and adopt cashless payment tools. Financial institutions can build on that progress by simplifying how these merchants are verified and onboarded.
Automated, risk-based processes could replace some traditional paper checks and physical audits, allowing financial institutions to assess merchants more efficiently without eliminating appropriate safeguards.
The need for automation was reinforced by internal polling at the roundtable. Executives ranked business document verification and compliance checks as the highest-priority workflow for automation, scoring it 4.4 out of 5.
Yet onboarding is only the beginning of merchant trust.
As fraud techniques become increasingly sophisticated, institutions must also be able to identify suspicious behavior after an account has been approved. Real-time behavioral analytics and continuous fraud monitoring can help detect threats including document forgery, deepfakes and post-approval misuse while allowing legitimate businesses to operate with less unnecessary friction.
“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.”
Better verification can also open the door to better credit decisions.
Traditional lending models can disadvantage merchants without established credit histories. Alternative data such as digital payment activity, utility payments and transaction footprints can provide financial institutions with additional insight into a business’s operations.
When paired with progressive lending models that allow credit limits to increase alongside merchant growth, alternative underwriting could potentially open formal financing to 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 underscored that the next stage of financial inclusion will require a shift from static checks to continuous intelligence. By combining stronger merchant verification, real-time protection and alternative data, financial institutions can create an environment where legitimate MSMEs can enter the formal economy with greater speed, security and confidence.
For more information on the roundtable discussion, visit www.idfy.ph.