More Filipinos today are opting to use digital payment methods for their daily transactions. Understand the motivations behind this trend and how technology is changing the way Filipinos pay.
In recent years, the Philippines has seen a rapid shift towards cashless payment methods. From the use of credit and debit cards to mobile payment solutions, Filipinos are increasingly embracing digital transactions.
Bangko Sentral ng Pilipinas (BSP) is keen on digitizing 50% of all retail payments. In this article, we will explore the reasons behind Filipinos’ preference to stay cashless on the go.
With digital payment methods, Filipinos no longer have to carry cash with them or worry about losing their wallets. They can make payments with just a few taps on their smartphone or a quick swipe of their debit card.
This has made transactions much faster and more efficient, especially for those who make multiple payments in a day. Digital payment options are also available 24/7, which allows users to make payments even outside of normal banking hours.
Digital payments are more secure than cash transactions as they are less susceptible to theft and fraud. With the increasing use of mobile payment solutions like GCash, Maya, and Paypal, Filipinos can now send and receive money from anywhere in the world, making it easier for them to manage their finances and reduce the risk of theft.
Additionally, digital payments are typically linked to bank accounts, which are insured and protected by government agencies, providing additional peace of mind for users.
Digital payment options have especially been more attractive modes of payment since the pandemic. According to World Bank, over 40% of adults who made online payments using a card, phone, or the internet did so for the first time since the start of the pandemic. These were done to limit contact and the spread of the virus, and have eventually become second nature.
Digital transactions mean that there is no need for physical cash to be handled or transported, which can be costly and time-consuming. This has resulted in significant savings for businesses, as they no longer have to pay for the printing, distribution, and storage of physical currency.
Innovations like QR codes and NFC have emerged in the market to streamline online payments for customers. A quick scan from a smartphone, then 2 seconds later, you’re all paid up.
Ease of Group Payments
Cashless payment options make splitting the bill for barkada meals or group activities way easier. No need to count your bills to see if you have exact amounts to pay your friends back for your share.
Interoperability with E-Wallets
Over 20 million Filipinos are e-wallet users, which are highly embedded into digital payment solutions. Certain new-wave e-wallets are designed to integrate seamlessly with the world’s leading digital payment systems. Meaning: e-wallets can now act as bank accounts which enable users to transfer money from e-wallets or cards seamlessly—opening up the possibilities for digital payment.
Growth of E-Commerce
The e-commerce market has only boomed since the pandemic’s onset. There are over 73 million e-commerce users in the Philippines alone. As Filipinos are more comfortable with shopping online, digital payments are increasingly becoming the preferred payment option.
BSP has launched several initiatives aimed at promoting digital financial services, including the National Retail Payment System, which aims to create a more efficient and secure payment system in the country. The government has also introduced incentives for businesses and consumers who adopt digital payment methods, such as lower transaction fees and tax breaks.
The Philippines has a ways to go in terms of fully digitizing financial payments within the decade. While the ambition may seem lofty, it is a worthwhile step towards a more financially secure and globalized economic system within the Philippines.
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