Quick adaption of online payment services
The share of the banked population in the Philippines was among the lowest in the Asia Pacific region. This makes digital payments a viable alternative for the unbanked to access financial infrastructures. Among the most popular ones were mobile or digital wallets, which were available in the country as early as 2001. Signing up only required a phone number and a valid ID. In 2020, close to 25 million Filipinos were using mobile wallets to make or accept online payments. Domestic players GCash and Maya lead the mobile wallet market in the Philippines.Aside from mobile wallets, QR-based payments were also essential payment alternatives. The Bangko Sental ng Pilipinas, the country’s central bank, introduced QR PH in November 2019 for peer-to-peer (P2P) payments. Two years later, the person-to-merchant (P2M) payment system was also created to allow payments to establishments such as drug stores and department stores. As of April 2022, the number of merchants participating in this payment method increased by 70 percent compared to the previous month. QR PH P2M will soon be rolled out for paying bills.
The future of digital payment
While the pandemic boosted digital payment usage, the foundation for its successful uptake was already there. Filipinos have high mobile literacy, with an estimated 74 percent of the population owning a smartphone. Remittances from overseas Filipino workers (OFWs) also contributed to this as online remittance services allowed transfers straight to a recipient’s mobile wallet, aside from cash pickup locations. Furthermore, more merchants started accepting alternative payment methods alongside credit and debit cards.Online card payments, bank or electronic fund transfers, direct debit, and mobile contactless payments were also available in the Philippines. Cryptocurrency is also being considered as a payment option. Such payment methods were in line with the goal of the Central Bank in making the Philippines a cash-lite society. In 2021, the volume of digital payments made was 20 percent shy of its goal of raising the total retail transactions to 50 percent in 2023.
