Cash, not cards, is still king in RP

DAVAO CITY – Electronic payment maybe convenient, but for Filipinos, cash still reigns supreme as king.

"Cash is still king for Filipinos. Most Filipinos, as much as possible would still like to pay in cash," James Dixon, country manager for Visa International, said.

Dixon said that with such a situation, the challenge for Visa International now is how to increase electronic payments in a country of more than 85 million people.

"There is still so much room for growth in use of electronic payments in the Philippines," Dixon pointed out.

He told The STAR that of the 85 million Filipinos, an estimated of only between six and seven million are considered to be credit eligible.

And of the said figures of credit eligible individuals, only three million actually have credit cards and most of whom are self-employed and found in the three key areas in the country like the National Capital Region, Cebu and Davao City.

The credit eligibility is said to differ from one bank to another depending on the minimum income requirement. But added to the three million credit card holders are the 1.2 million members of Government Service Insurance System (GSIS) who are debit card holders.

Debit cards are those used to make an electronic withdrawal from funds on deposit in a bank, as in purchasing goods or obtaining cash advances. And the top three spending categories for Filipino credit and debit card holders have been noted to be supermarkets, restaurants and department stores.

"These are expected places since they accept credit or debit cards and are easily accessible to most consumers," he said.

Dixon said that his firm is aiming at increasing the use not only of credit cards but also debit and prepaid cards in areas outlying the urban centers. "We want to see more and more people in the rural areas use these cards and that is the challenge that we in Visa would want to hurdle," Dixon said.

Visa International is looking in particular at the inbound tourism industry, especially in places like Mindanao.

"We could help a lot the local tourism industry as Visa is also linked up with most major tourism establishments in other countries considered to be potential markets for Philippine tourism such as Korea," Dixon said.

Visa claims to connect over 1.3 billion cardholders all over the world with 24 million merchants and 21,000 financial institutions. In the Philippines, Visa reported a growth of 27.1 percent in retail sales volume for 2005, amounting to P76.5 billion compared to the 2004 levels.

Dixon said there has been a growing number of electronic transactions in the Philippines which reached 70.8 million for 2005, indicating an increase in the acceptance of credit, debit, as well as prepaid card payments. The total number of merchant outlets accepting electronic payments in the Philippines reportedly also grew to 69,300 last year.