Cash-free PH? For Pinoys, that also means embracing their check books
While digital payment transactions have soared since the COVID-19 pandemic hit the Philippines in the first quarter of 2020, check payments seem to be making a comeback despite banks’ efforts to migrate clients to more cost-efficient channels.
This is according to HSBC Philippines, which recently organized a virtual summit to discuss the challenges and opportunities in moving away from check payments.
HSBC recorded an exponential increase in digital payment transactions over the past year via electronic fund transfer service PESONet. From 120,000 payments during the first quarter of 2020, PESONet transactions increased to 900,000 payments by the end of the first quarter this year, posting a volume growth of 650 percent.
“Since the implementation of the National Retail Payments System (NRPS) in 2017, HSBC has worked closely with the industry and our customers to drive the adoption of digital payments. The exponential growth in our PESONet volume shows how our corporate customers have adapted to the current challenges brought about by COVID-19, and how they are preparing for the future,” said Mimi Concha, head of wholesale banking at HSBC Philippines.
“However, by March 2021, we observed that check volume was gradually picking up, despite the high-cost and the risk of face-to-face transactions. We knew then that we had to act to provide our customers with better alternatives and encourage them to utilize more convenient and safer digital payment options,” Concha added.
Many companies in the country still heavily rely on checks to pay suppliers and the government. Since the start of this year until end-May, 130 million checks have been cleared in the country, compared to 60 million and 75 million, respectively, in Southeast Asian neighbors Vietnam and Thailand.
The Bangko Sentral ng Pilipinas aims to move half of the payment transactions to digital channels and enable 70 percent of Filipinos to access online financial services by 2023.
HSBC Philippines president and CEO Graham FitzGerald said: “Transforming the Philippines into a cash-lite and cheque-lite economy requires proactive dialogue, close collaboration and collective action among the regulators, government agencies, industry experts, financial services providers and businesses. HSBC is committed and focused to support the shift to faster, smarter and safer payments.”
