The Philippines is on the verge of becoming a coinless society, according to an information technology executive.
Digital payments are becoming the preferred mode of settlement of Filipinos, as the government promoted cashless transactions as part of the health protocols to prevent the spread of the virus.
Paymaya Philippines Inc. founder and chief executive Orlando Vea said cashless modes of payment”•which include e-Wallets such as PayMaya, cards and bank transfers”•most likely reached a tipping point in 2020 when more than 50 percent of online shopping transaction value were paid through cashless means, based on data from Google, Temasek, Bain & Company, Euromonitor and PayMaya.
“From cash-on-delivery, today COD now means cashless orders and delivery. In 2020 alone, we processed over P95 billion worth of online shopping transactions across all of our platforms, which only shows that consumer preference for cashless payments and online shopping is overwhelmingly present,” Vea said.
He said because of this development, the Philippines was on the cusp of an online shopping explosion as financial technology providers, digital players, businesses and the government accelerated the pivot to digital, bolstered by the launch of the update e-Commerce Philippines Roadmap 2022 by the Department of Trade and Industry on Friday.
With the updated e-Commerce roadmap for 2022, the DTI is targeting to increase e-commerce merchants to one million from a base of 500,000 and hike e-commerce contribution to Philippine economy to 5.5 percent from 3.4 percent last year.
“As we recharge our economy and build back better in the post-pandemic era, let us create a ‘better normal’ by taking advantage of the benefits of e-commerce. And as we aim for fast, convenient and easy commerce in a digital world, let us remember that more e-commerce means more jobs and employment generated for our countrymen,” Trade Secretary Ramon Lopez said during the launch of the updated e-commerce roadmap.
Vea said the conditions created by the COVID-19 pandemic accelerated the push for e-commerce, but the support of players in the entire ecosystem would turbo-charge its growth all the way to 2022.
“With the guidance of DTI and the push to make e-commerce easy for all players involved, we are seeing online shopping and cashless payments boom in the country like never before,” Vea said.
“Consumers are now used to ordering online or via their phones and paying via cashless, and many businesses have accelerated their migration to digital, so there’s no turning back now when it comes to digital payments and e-Commerce in the Philippines,” he said.
PayMaya is an end-to-end digital payment ecosystem enabler in the Philippines with platforms and services that cut across consumers, merchants, communities and government.
PayMaya saw marked increase in the number of micro, small, and medium-sized enterprises utilizing its cashless payments solutions as many of them migrated or began their operations online”•with DTI recording as many as 900,000 newly registered business for the entire 2020.
Through its app and wallet, PayMaya provides over 28 million Filipinos with access to financial services. Customers can conveniently pay, add money, cash out or remit through its over 200,000 digital touch points nationwide, the widest network in the country.
Meanwhile, GCash, the mobile wallet of Globe Telecom Inc., said it recorded over P1 trillion in transactions in 2020, a 254-percent growth from 2019.
The service peaked to P7.5 billion in daily gross transaction value, and more than 6 million transactions a day. Customer base ballooned to more than 33 million”•a third of the Philippines population”•from 20 million in 2019.
“The remarkable growth GCash experienced this year shows that Filipinos have embraced financial technology. People have realized that fintech isn’t just an option but a necessity, allowing them to fulfill their financial lifestyle conveniently,” GCash president and chief executive Martha Sazon said.
Sazon attributed the exponential growth of the mobile wallet firm to people’s readiness to shift to cashless payments. Consumers found fintech a necessity during the pandemic, she said.
The growth is driven by an unprecedented surge in usage in GCash to GCash money transfers, bank transfers, online and offline cash-in services, and bills payments, all of which have become necessities during the pandemic.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the country is on track to achieving its goal of having a coinless society by 2025, especially with the increase in digital transactions that are evident during the COVID-19 pandemic.
Diokno said in an online briefing the BSP pursues a phased digital transformation wherein the country would transition from a cash-heavy, to cash-lite and eventually a coinless and cashless society.
“We expect a coinless society by 2025,” Diokno said. “The BSP expects the transition to gather pace amid the rise in electronic payments during the COVID-19 pandemic.”
“In view of this, the BSP will continue to engage the public to ensure that Filipinos will adjust well to this transformation,” he said.
Diokno said coin demand in 2020 fell by 57 percent in volume and 60 percent in value compared to 2019.
“While softer economic activity may have partly led to the drop, broadening access to safe and convenient e-payment options may have also contributed to the decline in coin demand,” he said.
As physical distancing and quarantine protocols catalyzed the use of digital payments, Diokno said PESONet and InstaPay transactions reached record highs last year.
In 2020, the volume of PESONet transfers surged to 15.3 million, up by 376 percent year-on-year. The value of PESONet transactions jumped 188 percent to P951.6 billion.
Payments made through InstaPay reached 86.7 million, up by 459 percent year-on-year. These transactions were valued at P463.4 billion, a 340-percent increase from 2019.
He said the BSP and the industry led by the Philippine Payments Management Inc. are continuously collaborating to develop more avenues on safe and efficient digital payments.
The BSP also intensified its information campaign on cybersecurity and the responsible use of e-payments to promote confidence in the innovative systems.
“As we journey towards a cashless and coinless society, the BSP remains committed to ensuring that no Filipino is left behind in its pursuit of inclusive economic growth,” Diokno said.