The Philippines has made great progress in its efforts to become a cashless society. This progress is so rapid that according to the latest Visa Consumer Payment Attitudes Study, 92% of Filipinos already use various cashless methods to shop and pay. About 61% of Filipinos have less cash in their wallets, resulting in a decrease in cash transactions (60).
The study also showed that the Philippines has the highest awareness of QR code payment in Southeast Asia, and the COVID-19 pandemic has brought forward the expectation of Filipino consumers to become a cashless society by three years. There are several other factors that have contributed to the country’s seamless and rapid transformation.
Favourable government regulations for a cashless society
The government’s inclination toward digital payments can be traced back to the launch of E Gov Pay, which enables consumers to make payments to government agencies. Since then, E Gov Pay transactions have surged, with the Bangko Sentral ng Pilipinas (BSP) reporting a 467% jump to 91,000 by the end of 2021, from about 16,000 a year earlier.
Benjamin E. Diokno
Benjamin E. Diokno, governor of the Bangko Sentral ng Pilipinas, said: “The continued growth in EGov Pay usage, even after the lifting of liquidity restrictions, is a testament to consumers’ growing preference for digital payments.
“By participating in EGov Pay, government agencies can efficiently collect revenues, which is essential for the delivery of public and social services. In addition, governments can curb revenue leakages through efficient collection, better audit trails and enhanced transparency,” the central bank added in a separate statement.”
The government’s recognition of financial services and digital payments provider PayMaya (now known as Maya) enables national agencies and local government units (LGUs) to accept cashless payments and disburse financial aid anytime, anywhere.
According to The Star, more than 60 national and local government agencies and units, including the Bureau of Internal Revenue (BIR) and the Social Security System (SSS), have chosen the Maya platform to provide citizens and businesses with a safer and better way to pay taxes and fees.
Fees on micro-transactions
The Bangko Sentral ng Pilipinas (BSP) has eliminated fees on small transactions to help the country’s cashless transition. Under QR Ph Person-to-Merchant (P2M), the moves make payments to small businesses easier and support daily small transactions such as payments to tricycle services, market vendors and grocery store owners.
Instapay is an electronic funds transfer (EFT) service launched by the Bangko Sentral ng Pilipinas (BSP) in 2018. It allows users to transfer funds from bank accounts to e-wallets or vice versa, allowing for small transactions to be conducted securely and in real time on a reliable platform. The service connects banks and non-bank electronic money issuers (EMIs) in the Philippines.
With transactions of up to 50,000 pesos per user per day and subject to the rules and service levels of Automated Clearing House (ACH) participants, Instapay appeals to the mass market with a secure, real-time and fee-free way to send and receive money electronically.
E-wallet players
E-wallet companies such as GCash and Maya have also contributed to the Philippines’ cashless transformation as these platforms enable cashless payments in the market while also providing solutions such as lending, crypto trading, and micro-investing.
GCash allows users to top up their wallets in the app and make transactions to another GCash wallet, other e-wallet systems, and bank accounts. If users open a savings account, they can enjoy the best interest rates, with annual interest rates up to 4.1.
GCash also offers loans to users through GLoan, where borrowers can get 50,000 pesos with a minimum monthly repayment of 260 pesos and a repayment period of up to 12 months. GGives offers users the option of installment payment (BNPL) with low interest and flexible repayment periods ranging from 3 to 12 months.
Maya is another e-wallet company in the Philippines that, as mentioned earlier, is recognized by the government for good reasons. Aside from the standard features of making and receiving payments, Maya is more than just an e-wallet service.
Angelo Madrid
“The Maya brand represents the next phase of financial services in the Philippines. Through Maya, we will accelerate financial inclusion in the country by providing more Filipinos with meaningful products and services that improve their access to savings and productive capital,” said Angelo Madrid, President of Maya Bank.
Users can purchase game badges on popular games and platforms such as Mobile Legends, Garena and Steam. The e-wallet offers travel services, including booking flights and hotels, as well as paying tour guides and employees on business trips.
Users can also purchase insurance that covers their online purchases, receive up to 8,000 pesos per claim, and protect their mobile devices for premiums as low as 21 pesos, with plans ranging from 85 pesos to 105 pesos per month and up to 20,000 pesos in cash assistance.
Advantages for growth in the Philippines
In 2022, the population of the Philippines will reach nearly 100 million, making it the seventh most populous country in Asia. With an average growth rate of 1.35% and an additional 1,464,463 people per year, the market potential for cashless innovation is endless.
With supportive government policies and the introduction of new technologies to modernize society, soon Filipinos may no longer have to carry a physical wallet when going shopping or having dinner with friends or family.
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