PH unbanked turning to digital finance–study
A dominant force for decades, the Philippine prepaid market is fast evolving as users adjust to the new normal.
Prepaid financial technology platform Ding said prepaid users in the country were quickly turning to digital banking and even cryptocurrency—segments which could eventually overtake the below average usage of traditional banking.
“The trends we’re seeing in the Philippines indicate that people who have not had access to traditional banks may now choose to avoid them altogether,” Ding CEO Mark Roden said.
He was citing the results of bi-annual Ding Global Prepaid Index, which examines the behavior of prepaid users.
Its most recent survey gathered data from 6,250 respondents from the Philippines, Kingdom of Saudi Arabia, United Arab Emirates, Mexico, India, Nigeria, Germany and Brazil.
Ding said that just 30 percent of Filipinos had bank accounts, which was lower than the average 52 percent among the countries surveyed.
At the same time, Roden said that Filipinos had “high percentage of crypto adoption” at 19 percent.
“This is a hugely interesting contrast,” he said.
Cash still king but . . .
The company added that “digital banking is slowly becoming an attractive option for Filipinos.”
“As a country with over 2.2 million overseas Filipino Workers, online banks offer a more accessible and convenient option for overseas Filipino workers to send money to their family back home and to other kababayans (compatriots),” it said.
The ongoing shift offers a preview into the future since cash remains the leading payment option in the Philippines. In fact, Ding said some 68 percent of Filipinos preferred cash as their main form of payment—higher than any other market surveyed.
The changing behavior of the prepaid market was also reflected in shopping habits of users.
“More than a third of prepaid consumers are making an online purchase at least twice a month, and 22 percent are doing so one to two times a week,” according to Ding.
Shopping cart
Top online purchase by Filipinos involved fashion items (61 percent) and groceries and meal take outs (62 percent), the Ding survey showed. At the bottom of the list were payments for travel as the tourism sector was heavily impacted by the COVID-19 pandemic.
This shift to digital platforms was supported by the deep penetration of social media networks in the country.
Ding noted that Filipinos placed a high level of trust in social media (81 percent), making this a “dominant platform for Filipinos to communicate virtually.”
This was despite social media being a prime avenue for misuse, or where users fall victim to “inflammatory, insincere, digressive, extraneous or off-topic messages.”
The Philippines tops the all-markets average for levels of misuse seen and experienced on both Facebook (68 percent) and TikTok (25 percent), Ding noted.
