Digital technology has made receiving money from loved ones abroad quicker and easier than ever before. Despite the convenience of mobile and online financial services, many adults across the globe relying on international money transfers remain unbanked.
According to the United Nation’s Financing for Sustainable Development Report 2021, 94% of adults in developed countries have a bank account, but less than two-thirds (63%) have one in developing countries.
In 2021, the Bangko Sentral ng Pilipinas (BSP) revealed that over 36 million Filipinos remain unbanked, and as of the 2nd quarter of 2021, data showed that 41 million Filipinos are unbanked, which equates to a little over half (53%) of the country’s adult population.
For those unbanked individuals, having access to digital solutions that allow them to take care of daily needs, pay bills, etc. became more feasible as COVID swept across the globe and behaviors shifted to an online-first approach.
During this time, there was an increased adoption of mobile money, a form of electronic money that allows people to conduct financial transactions using a mobile phone. One of the overwhelming benefits of mobile money is that it allows financial services to be offered to unbanked people at a significantly lower cost.
“Although the Philippines have made progress in making digital finance accessible for all, many Filipinos who remain unbanked still find international remittances through mobile wallets intimidating,” said WorldRemit Country Director, Earl Melivo. “Educating Filipinos on the benefits and convenience of banking online, compared to in-person transactions or not having a bank account at all is therefore essential to further growth and adoption of digital solutions.”
Although seven out of 10 unbanked adults in the Philippines own mobile phones, online banking and use of mobile phones for financial transactions is being adopted at a slow rate. The BSP noted that a lack of awareness on online financial service offerings and a preference for completing transactions in-person stood as the major barriers to the shift online.
For those who are afraid of diving into a mobile wallet system, and are unable to obtain a bank account, finding ways of accessing funds might be challenging.
Reaching the unbanked
How does an individual abroad send money to their loved ones back home who have no bank account or no mobile money provider?
According to WorldRemit, the answer is cash pickup.
“While online transactions become more popular throughout the Philippines, we want to ensure beneficiaries can still claim remittances with ease wherever they may be—it’s as easy as going to their neighborhood pawnshop,” said Melivo.
While mobile wallets continue to grow, those who prefer to use cash will still remain. To support this, WorldRemit continues to maintain its robust network of 25,000 cash pick-up locations.
As remittances remain a vital lifeline for the Philippine economy, ensuring customers have access to receive these funds in whichever way they require, remains essential.
For overseas foreign workers sending money home, WorldRemit offers customers a better way to send money with fast international cash transfers and low transfer fees. Signing up for a WorldRemit account is free, and offers several payment options such as: bank transfer, credit, debit or prepaid card, Google Pay, and Apple Pay.