INDUSTRY players and government regulators in the Philippines were urged to collaborate to further drive the adoption of digital payments, eventually unlocking the full potential of this emerging payment method.
Rahul Singhal, PayPal general manager for Southeast Asia, said that the role of digital payments is rapidly evolving and that it has become more than just a mode of transaction between sellers and buyers.
“Digital payments have become the platform for its users to achieve better financial well-being and greater economic opportunity,” he said in a statement.
According to the digital payments provider, the Philippine government is making strides in rallying Filipinos to adopt digital payments, including the roll out of the National Retail Payments System Framework, which seeks to create a reliable electronic payment system between banks and e-money accounts.
A new research from PayPal reveals that the adoption of digital payments is having a big impact on the lives of consumers and businesses in the Philippines.
Findings from the study, “Digital Payments: Thinking beyond Transactions,” highlights the positive impact of digital payments on consumer and merchant welfare by reducing inefficiencies and unlocking economic opportunities.
The study surveyed 4,000 consumers and 1,400 merchants across seven markets in Asia, of which 500 consumers and 200 merchants were from the Philippines.
“Transparent tracking of money flow, improved transaction efficiencies, unlocking new business models, and the creation of more economic channels are just a few ways digital payments drive economic opportunity for both consumers and businesses,” Singhal said.
PayPal said the Philippines is well on its way to becoming a cashless nation, with 25 percent of consumers surveyed indicating that traditional (physical credit card, bank transfer or internet banking, cheque) and new payment methods are now their primary options.
The research pointed out that one third of the consumer respondents from the Philippines have already started transacting without cash.
Most respondents (74%) cited convenience as a reason to use digital payments while 56% said it was because of lower processing and transaction feeds compared to traditional methods. On the other hand, 27% of respondents prefer new payment options because of more promotions compared to the 23% who use traditional methods and 12% who use cash.
The study also revealed that digital payments have provided consumers with the tools to better manage their finances, in particular, bill payments.
PayPal said that digital payments also offer a transformational solution for merchants because they increase convenience for consumers.
Additionally, merchants are able to reap large efficiency gains once they transition from cash to digital payments, moving away from manual financial tracking and toward electronic means.
“The benefits of business owners range from reduced operational costs, convenience of transactions to allowing new business models, such as social commerce (s-commerce), to solidify,” the study said.
PayPal added that with social media moving beyond a networking platform to a digital marketplace, the adoption of digital payments is further boosted with its ability to offer seamless payments between merchants and consumers.
Maximo Rey Eleccion, past president of the Cebu Bankers Club (CBC), said digital payments provide convenience and an accurate medium of exchange as it minimizes the usage of cash and checks.
However, he said controls and safeguards should be properly put in place to protect the public and the nation’s banking system.
“(Among the examples) is the proper identification of parties involved in the transaction, that source of funds duly identified and that it is within the financial capacity of the persons involved,” he said.