Cash on delivery still rules Philippines online shopping

MANILA, Philippines — The Philippines is expected to remain Southeast Asia’s last major market where cash-on-delivery (COD) accounts for more than a fifth of online purchases in 2027, even as digital payments continue to grow rapidly, according to financial technology firm Xendit.

In its E-commerce Payments Momentum Report, prepared with market intelligence firm Cube, COD still accounted for about 23 percent of e-commerce transaction value processed through Xendit’s Philippine platform, the highest share among six Southeast Asian markets.

Xendit projected that COD would fall below 25 percent of e-commerce sales value across Southeast Asia next year. However, the Philippines is expected to remain above the 20-percent threshold.

In a press briefing, Xendit Philippines head of go-to-market Ina Gatan said the Philippines’ slower shift away from COD partly reflects its larger cash-dependent consumer base, limited access to banking services and concerns over the security of online transactions.

“Looking ahead, across the whole Southeast Asia, COD payments will actually fall below 25 percent of all e-commerce payments, but the Philippines will still probably be one of the fewer markets that are going to be above 20 percent,” Gatan said.

Asked when the Philippines’ COD share could fall below 20 percent, Xendit head of marketing Valerie Cai said the threshold might be reached within the next couple of years, although the estimate remains uncertain.

“If I were to make a guess, I think it would be in the next couple of years,” Cai said.

The pace of the transition would depend on regulatory developments, improvements in payment accessibility and changes in consumer behavior.

The report, which surveyed 6,000 online shoppers across six Southeast Asian markets, including 1,000 Filipinos, found that 33 percent of Philippine respondents were using COD much less frequently than a year earlier.

However, 12 percent of Filipino respondents said nothing would encourage them to abandon COD, roughly twice the proportion recorded in most neighboring markets.

Discounts and cashback emerged as the strongest incentives for consumers to shift toward digital payments, although Xendit emphasized that reliable refunds and stronger payment security would be necessary to sustain adoption.

Meanwhile, transactions using QR codes and bank transfers surged by 198 percent between January 2025 and April 2026, supported largely by the growing adoption of QR Ph and InstaPay.

Xendit said QR Ph accounted for about 13 percent of e-commerce value on its platform. E-wallet payments, meanwhile, grew by a more modest three percent during the same period, partly because digital wallets already account for a substantial share of online payments in the Philippines.

Xendit also sees opportunities in cross-border e-commerce, or purchases consumers make from sellers in other countries.

The Philippines had an estimated nine-percent cross-border share of e-commerce sales in 2026, among the lowest in the region, ahead only of Indonesia’s six percent.

This compared with 19 percent in Singapore, 15 percent in Thailand, 14 percent in Vietnam and 12 percent in Malaysia.

Xendit said regional cross-border e-commerce could grow by 11 to 19 percent annually through 2030, depending on regulatory developments and improvements in payment connectivity.

Across Southeast Asia, the e-commerce market reached an estimated $197 billion in 2025, up from approximately $3 billion in 2012. Cube expects the market to exceed $400 billion by 2031 as more retail spending shifts to online channels.