Claims that cash is still the preferred payment method for online shopping appeared to be waning with an online food platform now seeing a more neck-and-neck comparison among its customers.

foodpanda, an online food and grocery delivery platform, said it has observed a rapidly increasing number of their app users embracing digital payment methods, with their customer base now split between cashless and cash-on-delivery (COD) payments.

According to a survey by foodpanda’s Berlin-based parent company Delivery Hero on Filipinos' payment method preferences, 51 percent of consumers prefer paying with cash.

But the survey also showed that the other half prefers various digital payment methods, with 27 percent using a mobile wallet app, 17 percent using a debit or credit card, and the remaining four percent using other digital payment methods.

An underlying reason for those who continue to use COD is their habit, the ability to control spending, and a sense of security. Conversely,  those who opt for online payment methods primarily cite convenience as their top reason for using this payment method.

foodpanda Philippines Chief Executive Officer Daniel Marogy said that consumer behavior is changing rapidly towards digital payments.

“We have seen roughly an even split between Cash on Delivery (COD) and online payments. Prior to the pandemic, the preference was heavily skewed towards COD at an 80/20 ratio, so there’s been a significant and rapid shift in consumer payment behavior in a relatively short time,” said Marogy.

Future-proofing payment systems

The foodpanda data also aligns with the Digital Transformation Roadmap 2020-2023 of the Bangko Sentral ng Pilipinas. The roadmap aims to strengthen the country’s digital payment ecosystem, with the goal of digital payments accounting for 50 percent of all retail transactions.

To encourage the widespread adoption of digital payments and establish a secure and efficient digital financing platform, Marogy said that foodpanda has seamlessly integrated with trustworthy payment gateways. “Offering a wide range of payment choices, including credit cards, debit cards, and e-wallets, allows us to accommodate the different preferences of our customers and encourage them to make the switch to online payment methods,” Marogy noted.

For a simplified and faster checkout process, foodpanda introduced their e-wallet service pandapay that enables customers to store credits within the wallet. “With pandapay, app users can simply top up any amount on the foodpanda app to securely and conveniently pay for their food or grocery orders,” Marogy explained.

Marogy also shared that foodpanda has been providing incentives such as cashback, fast refunds and instant and secure transactions, to entice more customers to use pandapay.

Marogy emphasized that beyond their app users, this digital-first approach is holistic, encompassing their partner vendors and delivery partners. "We have streamlined the process for our partner vendors to receive their remittances, which can now be credited directly to their online accounts. Meanwhile, for a long time now, our delivery partners do not need to physically remit their daily earnings at our main office, as remittance outlets are now accessible wherever they operate,” he said.

Hybrid model

Marogy, however, said that the future of transaction payments will be a combination with both cash and digital methods complementing each other.

“Cash and digital payments will coexist for some time to come. The economy is still predominantly cash so that will reflect in our customers' payment choices on the platform. By offering both options for our app users, we provide flexibility to cater to diverse customer needs. Our goal is not to replace traditional methods with digital alternatives, but rather to give customers the option to freely select their preferred mode of payment,” said Marogy.