CASH may no longer be king in the Philippine payment space, a survey conducted by Visa Inc.
Based on the American multinational payment card services corporation’s Consumer Payment Attitude Study, only 87 percent of their respondents used cash for their transactions in 2023 compared to 96 percent in 2022.
Visa Country Manager for the Philippines Jeffrey V. Navarro said the data showed Filipinos’ use of mobile phones, QR codes and cards for payments increased to 87 percent last year.
“What’s very important is really the role of the regulator at the beginning, when they said that they want to transform retail payments to digital,” Navarro told reporters on the sidelines of the briefing last Thursday. “And because that’s part of their national agenda and transformation roadmap, they work(ed) with a lot of the partners, the mobile wallet operators, the financial institutions, to create products and services that can be easily accessed by consumers,” he explained.
In order to sustain these gains, Visa is already working with their partners to reach the “last mile” by creating offline solutions that Filipinos can use.
These offline solutions, which are still being developed, can enable Filipinos living in areas with slow to no Internet connection to make cashless payments.
Navarro said this is something that Visa plans to pilot this year or early 2025 in order to fasttrack digitalization and financial inclusion nationwide.
“So we’re trying to work with some of our issuers and acquirers to see if we can do something that’s offline. But these are very early discussions. There’s still no concrete solution. But it’s really one of those that we want to do because it, again, supports the national agenda of the government for financial inclusion,” Navarro said.
Based on the data, Navarro said 83 percent of their respondents attempted to go cashless in 2023. This was driven mainly by the younger generation of Filipinos.
Among Generation Z, the attempt to go cashless was 87 percent and among Generation Y, 86 percent. More affluent Filipinos at 87 percent also attempted to go cashless last year.
The data also showed 43 percent of Filipinos carried less cash in their wallets compared to 2022. Visa said Filipinos, on average, can go cashless for 10 days.
Given this, one in three Filipinos believed that the Philippines could already become a cashless society by 2030 or less than a decade.
The optimism stems from the increse in the acceptance of cashless transactions nationwide. This includes those made through mobile phones at 87 percent; cards, 63 percent; and contactless cards, 52 percent
Cashless payments were made in supermarkets at 88 percent; food and dining, 86 percent; bill payments, 82 percent; retail shopping, 80 percent; and convenience stores, 75 percent.
Meanwhile, based on the 2022 Annual Poverty Indicators Survey results, online buying transactions was the most common online transaction made using the internet by families with 59.7 percent.
The data released by the Philippine Statistics Authority (PSA) was followed by bills payment at 27.2 percent and banking at 18.2 percent; others, 11.7 percent; and selling, 8.8 percent.
The majority or 73.1 percent of families living in urban areas used the Internet in the last six months while it was more than half or 56.9 percent in rural areas.
For urban areas, PSA said 67.5 percent of online transactions were made to buy items while 35.3 percent was for bills payments; 24.7 percent for banking; 10.5 percent, others; and 10.1 percent, selling.
For rural areas, the APIS data showed almost half or 49 percent of online transactions were for buying items; 16 percent for bills payment; 13.3 percent, others; 9.3 percent, banking; and 7 percent, selling.
Earlier, the Bangko Sentral ng Pilipinas (BSP) disclosed the central bank may have reached the 50 percent of its digital payments target last year.
BSP Deputy Governor Mamerto E. Tangonan said given this, the central bank remains bullish about the growth of digital payment technologies. Tangonan added the BSP is committed to facilitating the efficient delivery of financial services to the unbanked and micro-sized, small-scale and medium-sized enterprises.
The head of the central bank’s Payments and Currency Management Sector credited the significant strides in digital payments to the implementation of the BSP’s 2020-2023 Digital Payments Transformation Roadmap with the support of its public and private sector partners.
The BSP said the Bills Pay Ph has also been launched to unify the country’s fragmented bills payment system and allow users to pay their bills whether or not they have an account with their billers’ payment service provider.
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