By Bernie Cahiles-Magkilat
The Philippines is well on its way to be a cashless nation, with 25 percent of consumers have indicated that traditional (physical credit card, bank transfer/Internet banking, cheque, etc.) and new payment methods are now their primary payment, survey said.
Findings from the PayPal study, “Digital Payments: Thinking beyond Transactions,” which surveyed 4,000 consumers and 1,400 merchants across seven markets in Asia of which 500 consumers and 200 merchants were from the Philippines, highlights the positive impact digital payments can have on consumer and merchant welfare by reducing inefficiencies and unlocking economic opportunities.
In fact, rhe survey showed that one third of consumer respondents in the Philippines have already started transacting without cash.
This because digital payments offer not just convenience and a more secure way to pay, but also provides consumers with more options.
Most respondents (74%) cited convenience as a reason to use digital payments.
Another 57 percent said it was because of the lower processing and transaction fees they received when using digital payments. Interestingly, 27 percent of respondents prefer new payment options because of the increased amount of promotions they received as compared to 23 percent who use traditional methods and 12 percrnt who use cash.
The study also revealed that digital payments have provided consumers with the tools to better manage their finances, in particularly, one of the most challenging financial issues faced by consumers – bill payments.
Among those surveyed, 54 percent of consumers who rely on cash have difficulties managing their bills / credit payments compared to a smaller proportion (29%) of digital payments users. The ability to track payments, pay instantly, and the choice of payment methods can be a boon to managing consumers’ cash flow and their financial health.
The strong social media iN the Philippines has also boosted digital payments.
The survey showed that among merchant respondents in the Philippines, 88 percent have turned to selling on social media.
For the Philippines, s-commerce is a viable opportunity for the significant rural population to tap into as a means to improve their economic well-being.
Digital payments offer a transformational solution for merchants because they increase convenience for consumers, said PayPal.
Additionally, merchants are able to reap large efficiency gains transitioning from cash to digital payments and moving away from manual to electronic financial tracking.
The benefits to business owners range from reduced operational costs, convenience of transactions to allowing new business models, such as social commerce (“s-commerce”), to solidify.
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.
The growing trend of s-commerce, of which digital payments is a key transaction method, has been shown to have positive effects on merchants’ financial health. A substantial 96 percent of s-commerce respondents said it has improved their financial condition and 88 percent mentioned that it helped grow their business.
The PayPal Research further indicated that the Philippines must adopt digital payments to fully realize its cashless journey.
Adoption of digital payments is having a big impact on the financial lives of consumers and businesses in the Philippines.