Speeding up our digital journey

It is said that every crisis has a silver lining. The COVID health crisis, for example, led us to one such fortunate outcome: the acceleration of the country’s digital journey.

With the imposition of quarantines during the peak of the pandemic and frequent local lockdowns for two years, mobility was severely curtailed. This effectively ground physical economic activity to a halt. Yet, people needed to continue functioning, albeit from within the confines of their home. There was only one recourse: go digital.

If there was ever an opportunity to stress-test the country’s digital preparedness and wiredness, COVID was it. Literally overnight, a country of 110 million people assaulted the digital channels. It started with people pounding social media and online news sources for information. Anxiety and fear of the unknown fueled a tsunami of questions and all sorts of news stories – fake or otherwise. The boundaries of digital exchanges stretched across the globe, hungry for every little morsel of information relating to the unfolding crisis.

Eventually, as the initial “anxiety attack” started to settle, the focus turned to getting on with life under quarantine, including setting up home-offices. What the Telecommuting Law that was passed pre-pandemic could not accomplish – encouraging employers to adopt work-from-home (WFH) protocols to reduce road congestions and reduce travel time for affected employees – the pandemic realized practically overnight. A whole nation found itself using digital pathways to telecommute to work. It was a mad scramble that pushed access to and the stability of Wi-Fi connections to the limit.

Meetings, consultations and even water-cooler conversations all migrated to virtual meeting rooms. Eventually, social events and gatherings among family and friends also went the virtual way. Then, inevitably, school went online. Though the pandemic was a bane to the economy, it was a boom for wifi providers like Globe, Smart, Cignal and for virtual meeting platforms like Zoom, Google Meet and Microsoft Teams. Online gaming and video streaming platforms like Netflix and YouTube became mainstays of daily life. Even medical consulting took to the digital world.

Filipinos started to realize that their life was now a 24/7 home affair. They realized that they had more time than things to do. Proxy activities for real-world activities were suddenly in big demand. This led to a boom in online shopping on platforms like Lazada, Shopee and Amazon. As well, a surge in online “dining” and “snacking” led to an explosion in food retailers. In turn, these fueled a rise in the delivery-gig economy.

Because of the onslaught on digital airwaves, Wi-Fi providers had to cope with a demand surge that, perhaps, did not figure in their projections until a decade or so later. Providers had to double time in maintaining and expanding their infrastructure and equipment. Recurring failures of the internet led to serious public outcries and calls by government to investigate and penalize telecoms. Flaws in the government bureaucracy were also exposed such as the inordinate amount of time it took to grant permits for the construction of signal towers.

The recourse to virtual life, of course, underscored the need for online payment solutions. The pandemic, therefore, also boosted the direction of the Philippine Central Bank to take the economy digital through the promotion of cashless transactions.

The banking world pivoted sharply to online solutions out of sheer necessity. For businesses, there was not much of a choice and the transition was fairly seamless. The challenge was for the significant number of unbanked Filipinos. This led to the unprecedented take-up in e-wallets that were proving to be agile and health protocol-compliant alternatives to physical payments. Pre-pandemic, GCash and Maya were already growing steadily. The pandemic led to a very steep spike in adoption that has been sustained even as the economy is reopening.

In 2020, cashless transaction accounted for 20% of total retail transactions. In 2021, this surged to 30%. By the end of this year, the Central Bank is targeting to reach 50%. A total of 140 million e-wallet accounts were reported by the Central Bank in 2020. As of September, 2022, GCash alone reported 75 million accounts. Maya, as of June, 2022, reported 50 million accounts. That is 125 million accounts just between the two largest ones. Other players include GrabPay, BDOPay, Lazada, Shopee, DragonPay and PayMongo.

In October 2021, Toyota Financial Services launched its own payment gateway called the Toyota Wallet. Initially, it serves payments for Toyota-related purchases at its dealers. It is tied-up to a user’s credit card. This year, The Toyota Wallet aims to become a full e-wallet solution. This is part of Toyota’s shift from being just a traditional automotive manufacturing and retailing business to a full mobility company.

The shift to digital is part of our better normal. There is no choice but to speed up even more.

For comments: [email protected]