‘Cashless economy drives high e-wallet penetration’

THE growth of the cashless economy has seen a surge of the e-wallet market in the last two years with the Bangko Sentral ng Pilipinas saying that as of the end of 2020, one in five financial transactions (including bills payments and money transfers) had been made through e-wallets.

Digido Finance Corp. CEO Nikita Saigutin told the BusinessMirror that one of the main factors for high e-wallet penetration is the efforts on the government’s side to drive the country towards a cashless economy.

“Promoting the financial inclusion of underserved populations, the Central Bank of the Philippines employed various micro-banking offices, e-money issuers, and remittance agents,” Saigutin said. “Consequently, the circulation of mobile wallets in the country also increased.”

She views mobile wallets as have been surging in popularity in the country.

“They address common local issues such as geographic disunity and low financial inclusion, while offering a faster, safer and more diverse service to the consumers,” Saiguitin said.

Several advantages

ACCORDING to Saigutin, in the coming years, e-wallets are set to continue their rise, relying on a synergetic relationship with similarly growing e-commerce.

“New companies will appear to offer flexible payment and shopping options, contributing to the diversification and enhancement of the Filipino financial ecosystem,” Saigutin said.

In 2017, the number of registered e-wallet accounts in the Philippines was almost 9 million. In 2020, mobile wallet usage was three times higher. By 2025, this number should rise to 75.5 million, according to Statista. In 2020, Filipinos transferred over P2.39 trillion via e-wallets, exceeding the amount in 2017 by almost 149 percent.

The same source shows that the share of fintech-companies offering mobile wallets is already ranked third in the Philippines in 2022, following the lending and payment sectors.

Saiguitin said many Filipinos warmly accepted e-wallets because they offer several advantages. Compared to other payment options, e-wallets are faster, safer and offer a more diverse set of services.

“Also, mobile wallets help to overcome the geographic disunity by virtue of easier access and application.”

As a result, the share of cash payments in the Philippines has decreased by 30 percent during the last 4 years (Statista). At the same time, digital/mobile wallets have seen a sharp rise from 1 percent to 16 percent, with the breakthrough trend during the pandemic in 2020; from 5 percent to 13 percent.

Uptake growth

According to latest data by the BSP, the uptake of financial services among Filipino adults grew significantly. Among all types of financial accounts—bank accounts, accounts with microfinance NGOs, e-money, accounts with cooperatives, accounts with non-stock savings and loan associations, e-wallet penetration is posting the highest growth.

Moreover, Saigutin pointed out that e-wallets are also the leading e-com payment method in the Philippines (30.5 percent, Statista). With the growth of demand, the market increases and new names appear.

“Such an instance, UnaCash, which is set to contribute to a diverse and competitive payments ecosystem, offering digital finance accounts to the unbanked population in the Philippines. UnaCash will be the one-stop shop for every financial need of the customer, including paying bills, purchasing goods and building credit history,” Saigutin said.

Notably, UnaCash analytical center has evaluated the penetration level of financial apps in Asian countries by their use. According to its analytical center, UnaCash said the Philippines has seen an increase in demand for e-money and mobile wallets (49 percent), which is second only to online loans (75 percent).

A mobile wallet (aka e-wallet) is an electronic device, online service, or software program that allows one party to make electronic transactions with another party bartering digital currency units for goods and services.

A mobile wallet user can pay for their purchases at any store that is partnered with a mobile wallet provider, all from the comfort of their home.


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