By Melissa Luz T. Lopez, Senior Reporter
THERE IS huge scope to raise digital transactions in the country by pushing more Filipinos to use their bank cards beyond cash withdrawals, payments provider Visa said.
Newly appointed Visa Country Manager Dan Wolbert said prodding consumers to use their debit cards beyond just withdrawals from automated teller machines (ATMs) towards over-the-counter and even e-commerce payments would drive increased activity in the online space.
“Debit is very popular — there are more debit cards in the market, but a lot of those are being used for ATMs. There’s an opportunity to try shifting a lot of that purchasing power to more point-of-sale,” Mr. Wolbert said during a roundtable discussion with reporters yesterday.
Credit cards are also popular in the local scene and generate higher spending compared to debit cards, he added.
Mr. Wolbert pointed out that there is “tremendous” potential for the global payments firm to expand their business in the Philippines, given an industry push towards more digital transactions led by the Bangko Sentral ng Pilipinas (BSP).
Under the National Retail Payment System, the central bank targets to shift cash-heavy transactions to digital avenues — which, in turn, should help broaden access to financial services and spur increased economic activity.
The BSP is looking to lift the share of digital payments to 20% of total transactions from a measly 1% recorded in 2013, with the country still cash-reliant at present.
“That’s where a lot of the growth will be coming from. You can imagine moving from one percent of total transactions… If the central bank will be able to achieve 20% over time, that’s where the growth is,” Mr. Wolbert added.
“I think the important thing is we know it’s going in the right direction. Universally, whatever you think that number should be, we all agree that number is just too low where it is currently.”
The Philippines remains cash-heavy to date, and lags behind other Southeast Asian peers in terms of e-payment activities. Digital transactions in Singapore and Malaysia average as much as 60% of total payments, while many other economies in the region also enjoy a double-digit share to overall settlements.
Mr. Wolbert, who heads Visa’s operations in the Philippines and Guam, added that more digital products and services coupled with financial education are needed to help e-payments gain more traction.
“Behavioral changes” can also be done through e-commerce, with a good number online shoppers move away from cash on delivery payment options.