CONFIDENCE in digital payments is expected to continue growing in the Philippines as the benefits of online outweigh the risks, Visa said.
“At the end of the day, there’s a clear benefit in going digital and it’s really about convenience and it enables you to do a lot of things. Even as a consumer, you also need to balance what you perceive individually as the risk versus the overall benefit,” Visa Country Manager for Philippines and Guam Jeffrey V. Navarro said to reporters on the sidelines of the launch of its Consumer Payments Attitude Study 2023.
Despite rising incidents of phishing and fraud, cashless payments have continued to gain traction, he said.
Improved internet connectivity, increased digital payment acceptance points, and increased investments in improving infrastructure will continue to drive digital adoption, Mr. Navarro said.
Visa’s Consumer Payments Attitude Study 2023 showed 62% of the respondents saying they carried less cash because digital options were available, with 61% saying going cashless also protects them from theft, Mr. Navarro said.
The respondents to the survey were 1,000 Filipinos aged 18-65 years old from September to October 2022.
Mr. Navarro said the study showed 30% of respondents believe the country will be cashless by 2025.
“There’s that belief and confidence that will happen if we look at what’s happening in the market, it supports that direction,” he said.
He added that the Bangko Sentral ng Pilipinas’ (BSP) Digital Payments Transformation Roadmap supports this outlook. Under this, the BSP wants to digitize 50% of the volume and value of retail transactions and to have 70% of Filipino adults be part of the formal financial system by the end of this year.
Mr. Navarro said he expects significant growth in cashless payments for bills payment, groceries, supermarkets, convenience stores, and travel.
There is also potential in the contactless card space, with the survey showing an increase in usage to 37% from 27%. The study also showed that awareness about contactless cards was at 93%, while interest was at 90%, Visa said.
“We feel that’s really going to grow because all of the cards, except some of the government cards, are already contactless. Most of the terminals are already contactless and there’s also an agreement that by April 1, most of it will already be contactless,” he said.
The use of mobile wallets and QR payments is also expected to grow amid high interest levels.
The potential reducing or cutting of digital transaction fees could also boost online payments, Mr. Navarro said.
“I think that will become very strategic, especially as we go to the smaller merchants… If the cost of facilitating payments is very low and free for certain bands of amounts, then definitely it has a positive effect on digital payments,” he said.
The study also said there was a decline in cash payments to 6.4 for every 10 purchases in 2022 from 7.8 in 2021 with “62% of consumers increasingly relying on cashless payments and 61% expressing concerns regarding the safety of carrying cash.”
Some 91% of respondents showed an interest in digital banking, up from 88% the year prior, Visa said.
“While cash remains a prevalent payment method, the study indicates that 82% of Filipinos have attempted to go cashless in 2022, with almost half (40%) succeeding for a few days. Notably, about 9% were able to go cashless for over one month,” it added. — AMCS