In PH, cashless whispers

Dan Wolbert, Visa country manager for the Philippines and Guam

As recently as five years ago, a world with no paper bills and coins changing hands was difficult to imagine.

Not anymore.

Indeed, factors such as technological advancements, consumer demand and the evolving banking and financial ecosystem have all combined to make it possible to eventually do away with cash altogether.

Committed to be part and even dictate the pace and direction of that inevitable payments evolution is Visa, the world’s leader in digital payments.

And while just a measly 1 percent of the total financial transactions in the Philippines is coursed through digital channels, the local unit of Visa remains confident that it will just be a matter of time before Filipinos catch up and ride on the digital payments wave.

For one thing, Filipinos are not afraid of technology, and are quick to adapt to changes brought about by technology once convinced that these solve a real need, easy and convenient to use and are secure.

And for another, institutions such as the Bangko Sentral ng Pilipinas (BSP) have embraced the future and have laid the policy foundation to enable digital payments to thrive.

The BSP, for example, is targeting that at least 20 percent of all financial transactions in the Philippines will be coursed through digital channels, be it through online banking or through e-commerce payments via credit or debit cards, which have long been Visa’s primary products.

According to Dan Wolbert, Visa country manager for the Philippines and Guam, Visa is seeing a rapid increase in general usage of digital payment channels because of e-commerce, the growth of the gig economy and then the everyday conveniences such as food delivery, ride-hailing apps and even online bookings for plane tickets.

According to the recent Visa Consumer Payment Attitudes study, 75 percent of 3,000 respondents plan on using more card payments instead of cash. In addition, two out of three respondents in the Philippines tried going cashless and close to 60 percent have gone cashless for at least a few days. Top benefits cited by respondents on why they use cashless payments include increased convenience, hassle-free and not carrying as much cash.

Transportation in the Philippines is a category where Filipinos are keen to use e-payments. Based on the study, almost nine out of 10 Filipinos are generally supportive of e-payments for transportation, which includes jeepneys, buses, trains, taxis and private car hires. In fact, more than half of the respondents think it is more convenient to pay using credit or debit cards for their transportation fares.

Beyond that, the research also shows how Filipinos are open to future technology to pay for their goods and services. Such technology leverages on card-on-file payments or digital payments. Six in 10 respondents express interest in using AI chatbots to order and make payments for their purchases. Ninety percent of respondents are also interested to use self-service checkout kiosks instead of going to cashier counters, and 72 percent of them prefer to use their payment cards, contactless payments or biometric payments.

“We would not have seen this five years ago,” Wolbert tells the Inquirer in an interview.

But even if there’s rapid growth from a low base, digital payments have yet to be a significant portion, but for Wolbert, it is just a matter of time before a critical mass of consumers and merchants conduct more of their business and everyday transactions through all manner of digital payment channels.

“We continue gaining merchant acceptance, so we have to make sure that the experience is smooth,” Wolbert says, adding that the Philippines is following the general evolution schedule followed by other markets, which went from swiping credit cards to dipping them in the terminals to contactless payments.

Over the past year alone, Visa further expanded its contactless acceptance footprint in the country through partnerships with SM and Robinsons. Through this partnership, Visa cardholders can just simply tap their cards on a payment terminal to complete payments at SM Stores, Robinsons Department Stores and Robinsons Supermarkets nationwide. They no longer have to dip, swipe or sign for payments worth a maximum of P2,000.

According to Visa, contactless payments in the Philippines are starting to take off, based on the triple-digit, year-on-year growth in terms of contactless spend and number of transactions in the Philippines.

The Visa study showed that contactless payments awareness and usage in the Philippines have also increased compared to 2017. The study showed that more than 80 percent of respondents are aware of contactless card payments, an increase of 11 percent compared to 2017. In addition, 84 percent of respondents have also indicated that they are interested to use contactless payments.

Helping spur that growth are collaborations such as that with Razer, the leading global lifestyle brand for gamers, to transform payments in the gaming industry by bringing the scale and reach of Visa’s global network to Razer Pay e-wallet users.

By riding on Visa’s global network, Razer Pay users will be able to make payments wherever Visa is accepted. The prepaid solution will complement Razer Pay’s existing offerings, which include everyday essentials such as mobile top-ups, leading virtual credits and entertainment purchases for music and streaming services.

But while Visa strives to drive further innovation through contactless payments and partnerships in the fintech world like the one with Razer, it is not about to lose sight of the traditional credit card business, thus efforts such as the Visa Epic Experiences to provide cardholders with more value for their Visa card.

Epic Experiences is a homegrown privilege program that enables Visa cardholders here and abroad to enjoy travel and dining benefits such as discounts and freebies.

Whatever the consumers and the merchants want, Visa wants to be a part of that financial journey.

“We want to be the connective tissue behind payments which continue to evolve,” Wolbert says. “Eventually, we will move to a world where we can buy using just a mobile phone. We will see new ways to access credit lines, bank accounts.”

“We want to drive a lot of the shift. As the worldwide leader in payments, that is a responsibility we take seriously. We want to not just participate but drive it, and that creates a lot of opportunities,” Wolbert adds.

As Visa says, its focus on innovation “is a catalyst for the rapid growth of connected commerce on any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce.”

Wolbert sees in the not-so-distant future a Philippines where a good number of Filipinos can go about their day without having to use cash.

“We are not yet there, but that is a good aspirational goal,” Wolbert says.