The volume of digital payments in the country rose to 17 percent of all payment transactions as of mid-2020, and closer to the 50 percent cash-lite target of the Bangko Sentral ng Pilipinas (BSP) by 2023.
The share of monthly digital payments in terms of volume has been steadily increasing from just one percent in 2013, to 10 percent in 2018 and 14 percent in 2019, according to BSP Governor Benjamin E. Diokno, citing data from Better Than Cash Alliance (BTCA).
“Early estimates from the first half of 2020 provides encouraging results where digital payments rose to 17 percent of all monthly payments,” said Diokno.
Dr. Ruth Goodwin-Groen, managing director of the United Nations-based BTCA, in the meantime said that “growing from one percent in 2013 to 17 percent in the first semester of 2020, is impressive!” and that the Philippines “is an example for the rest of our Alliance in making vital investments in infrastructure, creating incentives, and engaging both public and private sectors.”
The BSP is targetting a cash-lite economy by converting 50 percent of the total volume of retail payments into digital form by the end of Diokno’s term as BSP chief, which is mid-2023.
“We’ve seen very promising growth in digital payments in the last two years – we now must ensure that this growth is inclusive and that digital payments are serving all Filipinos,” he said during the launch of the QR Ph Person-to-Merchant (P2M) digital payment stream on Friday. The pilot run is until September this year.
The COVID-19 health crisis has accelerated the growth in digital payments, but before the pandemic, the volume of monthly digital payments already increased by 27 percent in 2019 due to “high-frequency, low-value retail transactions, like merchant payments,” said Diokno. Digital merchant payments grew by 33 percent in 2019. Payments to merchant is more than 70 percent of the total payments in the Philippines.
In terms of value, the monthly digital payments grew to 24 percent of all transactions in 2019 from 20 percent in 2018. By value, digital payments grew by 25 percent by mid-2020.
“In both results, the P2M and P2P use-cases proved to be driving the expansion of digital payments in the country. This only confirms that we are on the right track in providing the necessary interventions to promote digitalization of consumers and merchants alike,” said Diokno.
The increased use of digital channels for remittances and merchant payments grew by 39 percent and 66 percent, respectively, according to BTCA.
“The pandemic has highlighted the value proposition of digital payments. It is a good thing that the BSP had started to chart the country’s digital transformation journey even before the pandemic hit,” said Diokno.