Filipinos now finding more confidence to go cashless
Consumers in the Philippines, a nation of over 100 million mostly young people who are comfortable with a digital lifestyle, are increasingly going cashless in shopping and paying bills, according to a research from global payments solution firm Visa.
While cash still dominates the local payments scene, almost seven in 10 Filipinos said they were confident to go cashless for a day, using their credit, debit or prepaid cards instead. More than half (52 percent) said they could use purely electronic payments for up to three days.
The Visa Consumer Payment Attitudes Study is based on a 2017 internet survey that covered 500 respondents consisting of mass and affluent consumers nationwide. More than half of the respondents are based in Metro Manila. Nearly two-thirds are millennials and earning between P12,000 to P39,000 monthly. About 32 percent are the more affluent consumers earning P40,000 or more per month.
The Visa research showed 70 percent of respondents have gone cashless for at least a few days. Of these consumers, 58 percent cited convenience while 47 percent cited safety as the main drivers for going cashless.
“Technology has transformed the way consumers shop and pay for their purchases. Clearly, Filipinos are seeing the benefits of electronic payments in their lives, and this leads to a change in behavior, where they become confident in leading a digital lifestyle. In the country, we are seeing more Filipinos using digital payments and Filipinos are spending about 15 percent more on their cards as compared to a year ago,” said Stuart Tomlinson, Visa country manager for the Philippines and Guam.
In a press briefing, Tomlinson noted electronic payments accounted for around 16 percent of total transactions in the Philippines, while the bulk still consisted of cash.
Filipinos who shop online have increased to 92 percent in 2017 from 71 percent in 2016. Majority (66 percent) shop online at least once a month.
“This is an unbelievable statistic. The desire is there. The need is there,” Tomlinson said, amazed at how Filipinos have increasingly embraced online despite infrastructure challenges such as internet connectivity issues.
Consumers cited utility bills or fines (59 percent) as one of the top categories paid online, followed by fashion (43 percent), travel (40 percent), and beauty products (36 percent).
“Online shopping is clearly a popular pastime for Filipinos. Besides spending more time shopping online, they are also buying more. In fact, based on our data, they are spending almost 30 percent more on online purchases as compared to a year ago. Currently, online shopping contributes about one-fifth of total spend on Visa cards in the Philippines,” Tomlinson said.
Meanwhile, on-demand services, in the form of online websites or mobile applications, have likewise gained preference. The study suggested that more respondents now use digital platforms to book a ride (55 percent), order food (56 percent) and stream content from the internet (42 percent).
The research also showed that 65 percent of consumers check their accounts once a week via digital platforms, rather than going to a physical bank branch, to save time.
Awareness on other payment methods are likewise growing, with 71 percent of respondents now familiar with contactless payment technology which requires customers to wave their cards or tap their phones against a terminal when purchasing an item. Almost seven in 10 (69 percent) are interested in using such a solution over cash.
“Today, we see great progress in contactless payments usage by Filipinos and we have to thank our issuers and merchant partners for working alongside us to transform the payments experience in the Philippines,” he said.
Visa has partnered with several merchants, including SM Group, to boost this kind of payment of platform.
“This has given us a strong uplift in our contactless payments growth. Our data shows that the number of contactless payments in the Philippines have doubled quarter on quarter. Our objective is to bring contactless payments to more merchants in this country, and educate our community about this seamless and convenient way to pay,” said Tomlinson.
