SMEs urged to shift to digital payments

The small and medium enterprises (SMEs) are urged to shift to online payments amid the widespread digital transformation to thrive amid the coronavirus pandemic.

Bank of the Philippine Islands (BPI) said in a statement that now is the time for the SMEs to start using digital payments as lockdown measures minimize physical interaction with customers.

Eric Luchangco, BPI’s business banking head, said these companies should adapt to changing consumer behaviors as many customers are leaning toward contactless payments.

“The time is ripe for SMEs to transform their operations and their businesses by embracing digital payments,” he said. “It is the low-hanging fruit in their digital transformation that will make a great impact on them later on as they stabilize their operations and, in time, when the world is finally free from the pandemic.”

BPI said SMEs can maximize the electronic cash management tools to improve collection efficiency, payment handling and liquidity management. The digital payment platform also allows them to accomplish financial activities anytime, the bank added. BPI Luzon Sales Head for Cash Management Gerry Kahayon said the bank is offering an online business banking platform—called BizLink—that allows digital cash management for collections, disbursements and liquidity. “A cash management system reduces cash handling risks such as inaccurate payments and fraudulent activities, as well as limits any physical interaction, saves time, and lowers administrative costs, among others,” he said.

“An effective cash management tool may not be enough to ensure that SMEs will thrive in the future, but it will certainly help them cope with the demands of the business environment while ensuring security, safety, and peace of mind in these uncertain times,” Kahayon added.

In the first half, the Ayala-led bank saw its net earnings fall by 15 percent to P11.68 billion from P13.74 billion booked in the same period last year due to higher provisions for credit losses.

Allowance for bad debts for the period amounted to P15.01 billion. This is markedly higher than the P4.23 billion earmarked in the first quarter and P3.48 billion set aside during the first half of last year. Total assets as of end-June improved by 5.8 percent to P2.26 trillion year-on-year. Total equity reached P278.81 billion in the first half, translating to capital equity tier 1 ratio of 15.63 percent and capital adequacy ratio of 16.52 percent. Both ratios are above regulatory requirements.

In July, BPI concluded the offer period of its COVID Action Response (CARE) bonds on the back of robust demand. The subscriptions for the Philippines’s maiden COVID response bonds surpassed that initially planned P3-billion issue size.

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