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Over half of Filipinos who have tried electronic payment methods prefer it to using cash, as of 2016.
This is according to Visa’s Consumer Payment Attitudes Survey, an annual study conducted online across six markets in Southeast Asia.
Countries included in the study were Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Five hundred randomly sampled people between the ages of 18 to 55 from each country were surveyed.
Results revealed that among those surveyed, there was a 43 percent drop in Filipinos who preferred cash in 2016, which is 11 percent higher since 2015.
Forty nine percent of Filipinos have more cards in their wallets compared to five years ago, while 29 percent carry less cash.
In Southeast Asia, Filipinos were the most interested in contactless payments at 74 percent, and used them for groceries (58 percent), bills and fines (32 percent), and food and beverages (26 percent).
Security, convenience in going cashless
Why are fewer Filipinos opting for cash?
It was found that 62 percent of Filipinos found carrying cash unsafe and 57 percent preferred faster transactions which was possible with electronic payment.
In relation to this, 70 percent would prefer payments to be automated while 66 percent said using cards was safer than paying in cash.
However, there’s plenty of room for growth in terms of electronic payment usage. Using electronic payments for personal expenses (known as personal consumption expenditure or PCE) is only nine percent in the country.
To compare, PCE penetration is 54 percent for Singaporeans, 30 percent in Malaysia, and about 17 percent in Malaysia.
While we lag behind our Southeast Asian neighbors in electronic payment, Filipinos showed “a huge appetite for new technology that bring convenience and security,” says Stuart Tomlinson, Visa country manager for the Philippines and Guam.
More Filipinos are shopping online
From 60 percent in 2015, 71 percent of Filipinos shopped online using their personal computers (PCs) at least once a month in 2016. Fifty percent used their smartphone to shop at least once a month in the same year.
The regional average was 80 percent for shopping online on computers, and 71 percent via smartphone.
“While the Philippines is a developing market, the statistics are very impressive,” notes Tomlinson.
Electronic commerce (eCommerce) growth was up at over 30 percent, while PCs remained the preferred device when shopping online.
Filipinos had similar categories when using electronic payment on their computers and their phones. The top category was bills and fines payments for both, while other categories included personal electronics, fashion and accessories, travel, and beauty and cosmetics.
Tomlinson cited that in terms of travel, the rise of transport network vehicle services (TNVS) like Grab and Uber contributed an “incredible increase” in using electronic payments. Prior to this, the main use of travel payments online was for airlines.
The reasons behind this spike was secure payment at 56 percent, being able to compare prices (55 percent), and ease of checkout (52 percent).
How can more Filipinos go cashless?
Tomlinson shares that developed countries such as Singapore and New Zealand are practically cashless. A Kiwi himself, he relates that his travels across the world rarely involve cash.
However, barriers such as few banks and lack of Internet access contributed to the relatively lower adoption of electronic payments in the country.
To address this, Tomlinson says having more banks would lead to “financial inclusion” and help people feel more comfortable with using electronic payment devices, moving from an ATM machine to point-of-sales systems.
He cites that most Filipinos at 85 percent used debit cards, since only 15 percent are credit-eligible, showing that electronic payment is still in its early stages in the country.
Prepaid cards such as the Beep card can also help Filipinos become more familiar with cashless payment.
The late introduction of EMV technology in the Philippines, which makes debit and credit card transactions more secure, may have been a factor in the slow adoption of electronic payments in the country. The technology was only implemented this 2017 while it was in place ten years ago in other countries.
Still, there is optimism that Filipinos can catch up, especially if building infrastructure with banks and vendors is invested in.
The Philippine government has also been gearing towards cashless payments for increased transparency in transactions. JB
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