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reported to using online payment platforms over the past year. Among small-scale firms, the usage rate clocked in at 26%.

What’s more, only 11% of customers of micro-sized business ventures reported to being open to e- payments. Instead, clients largely prefer cash transactions.

“Businesses, especially small and micro, primarily transact with traditional instruments,” according to the USAID’s E-PESO Institutional Payments Baseline Survey report released yesterday.

“For micro and small businesses, increasing ATM (automated teller machine) usage would be the low hanging fruit; and for medium, large and GOCCs, it would be increasing digital channels (via mobile or computer).”

ATMs, pawnshops and bayad centers see the biggest traffic for retail transactions, according to the 2017 financial inclusion survey of the Bangko Sentral ng Pilipinas (BSP). A fifth of Filipino adults said they are “not aware” that electronic fund transfers are an option.

For its part, USAID said the main platforms for shifting to digital payments will be ATMs, fund transfers, credit cards and mobile money transfers. However, limited awareness and access among these small businesses stand in the way of embracing new technology.

Regardless of company size, the survey found that all firms consider limited Internet connectivity and “too much” effort needed to set up these new channels as barriers. In particular, small and micro firms think they “don’t need it.”

To push more people into going digital, USAID said firms need to highlight the improved speed, safety and convenience of transacting online versus paying with cash.

“Incentives by government and utility companies to switch to e-payments as well as making it attractive to do payroll through e-payments in banks can potentially drive e-payments growth,” the agency added.

The BSP targets to raise the share of digital payments to 20% of total transactions by 2020 from a measly 1% recorded in 2013 through its National Retail Payment System project.

Studies show that gross domestic product could increase by more than 14% if the financial inclusion gap was closed in the Philippines.