Cashless transactions gaining ground in Philippines

CEBU, Philippines — The implementation of the National Retail Payment System framework four years ago paved the way for the accelerated growth of digital payment in the Philippines.

“Philippines is supportive and moving fast. If you check, for example, the Bangko Sentral ng Pilipinas’ perspective, they have the 2020 program. They say that in 2020, 20 percent of the transactions should be cashless. They [BSP] are really pushing for it,” said Mynt’s vice president for Money Transfers Frederic Levy.

BSP’s National Retail Payment System framework, aims to increase electronic transactions exponentially at least in five years.

A 2015 Better Than Cash Alliance report estimated that only one percent of the financial transactions in the Philippines were done electronically.

By 2017, electronic transactions rose to 9.2 percent owing to BSP regulations and programs that made collaborations easier and inter-bank transfers not only possible, but convenient and seamless.

Mobile platform facilitates financial inclusion for 66 percent of Filipinos who are unbanked.

With one in three Filipinos still without physical access to banks, the Philippines presents fertile ground for innovations in fintech, said Levy.

Mynt is a fintech startup that operates GCash, which provides services in payments, remittance, loans, business solutions, and platforms.

Likewise, Mar Lazaro, head of PayMaya Business at PayMaya Philippines said BSP’s proactive stance in developing digital transaction in the Philippines attracts fintech (financial technology) companies to be aggressive in providing channels for digital transaction making it much accessible to majority of Filipinos.

PayMaya is on track to hit its target of 20 million users by 2020.

GCash, on the other hand, is also taking advantage of the fertile ground for digital payment in the country expanding its reach down to the grassroots.

 “With thoughtful collaborations, a wealth of problem-solving opportunities and a favorable regulatory environment, GCash is well-positioned to transform how Filipinos interact with money,” Levy said. “We just have to be more creative.”

Levy said emerging markets like the Philippines are rife with opportunities for the fintech sector. Gaps in the financial industry have thrown doors wide open for mobile platforms like GCash to leverage their technology and institutional partnerships in finding end-to-end solutions.

Studies show that 66 percent of Filipinos do not have bank accounts and 34 percent have no physical access to banks. Left out of the formal financial system, these citizens present a huge market for fintech innovations toward financial inclusion.

Recently, PayMaya announced its much aggressive penetration in enabling more Cebu-based businesses to join the full digital payment ecosystem.