CEBU, Philippines — While the Philippines is ambitiously aiming to increase its cashless transactions, an integrated system is what the president of Philippine Franchise Association sees as a key to digitize most of the country’s retail transactions.
Businessman Richard Sanz said that a lot of retailers are still reluctant to adopt digitizing their payment systems.
The gap that he sees is the country does not have an integrated system for cashless transactions.
This is the key reason why most Filipino retailers have not yet offered digital payment options.
Sanz in a recent interview pointed out the Philippines has to create a system that integrates all cashless payment platforms.
The businessman recalled this was also the case before when the country’s ATM (automated teller machine) system wasn't integrated, "where the system at that time didn’t accept payments yet from Megalink if you’re in BancNet."
Sanz believes digital payment system should be "platform-agnostic" which means transactions run on any platform or system.
“We are still in the initial stage where penetration is between five and 10 percent or even less. But down the road, in the next five years, PFA will be able to spearhead getting cashless as a more secure payment system,” the businessman explained.
Raymond Estioko, deputy director at the Bangko Sentral ng Pilipinas, earlier said the country is still in the early stage in the digital payment adoption.
Currently only about 1 percent of retail transactions in the country are done through electronic channels.
The use of cash and checks still dominates retail transactions.
"Another challenge we have is creating awareness among individuals and businesses and make them adopt electronic payments," said Estioko.
Under the BSP's National Retail Payments System, the central bank targets that by 2020, about 20 percent of retail transactions shall be done through digital channels.
"We need the support of businesses to adopt electronic payments in their operations and local governments to digitize their collections and disbursement of funds," he said.
The central bank had launched InstaPay and PESONet, urging the government and businesses to adopt these to meet their payment system requirements.
InstaPay is a real time account-to-account payments and fund transfer system that caters to low value payments of up to P50,0000.
PESONet allows individuals and businesses to initiate electronic fund transfers and recur payments from bank accounts to corresponding accounts in other financial institutions.