E-money transactions hit all-time high in 2016
ELECTRONIC MONEY transactions breached the P1-trillion mark in 2016, with the bulk still largely coursed through formal banking channels, the Bangko Sentral ng Pilipinas (BSP) said in a report.
Net e- money inflows in the Philippines totalled P1.1 trillion last year, marking an all-time high as more financial firms offered the digital services to consumers. Of the sum, P870.1 billion or 78.2% go through banks.
“The rapid evolution of digital technology particularly of smart phones at the turn of the new millennium revolutionized the way banking and financial products and services are delivered,” the BSP said in its report on the Philippine financial system for 2016.
“From a policy standpoint, these electronic service delivery channels provide a faster and more efficient alternative means to reach a wider base of clientele particularly those in rural communities.”
The central bank has allowed local players to offer electronic banking services since the year 2000, starting with pioneer ewallet products called G- Cash and Smart Money as offered by telecommunications firms. At present, e-money issuers account for over a fifth of the total digital transactions at P241.3 billion.
There are 119 local banks offering electronic banking as of end- December, according to central bank data. This complements banking access provided through 19,084 automated teller machines provided by the lenders nationwide.
In March, the BSP spearheaded the signing of agreements among banks and e-money issuers in setting up two clearing houses for digital payments within the year as part of the National Retail Payments System.
Under this framework, the central bank is looking to steer transactions away from cash and check- based payments to electronic fund transfers and e-wallet payments, seeing it as the more accessible platform to rural and unbanked customers.
The BSP is looking to raise the share of digital payments to 20% of total transactions by 2020, from a measly 1% share in 2013.
Based on industry estimates, there are about 2.5 billion in total monthly transactions, with nearly all settled using cash.
Shifting to electronic payments from cash- based settlements is seen to boost economic activity and gross domestic product growth by as much as 2-3%, the United States Agency for International Development previously said, as it gives faster access to funds for households and businesses which they can use for their upcoming expenses or investments.
With the push towards digital payments, the BSP has also rolled out a series of regulatory reforms to tighten cybersecurity protocols, including the use of multifactor authentication to prevent identity theft and stiffer malware and ransomware standards for lenders.