Visa sees growth in e-payments
VISA, INC. sees electronic payments in the country further expanding, with transactions through mobile phones expected to drive the rise in digital payments here.
Stuart Tomlinson, Visa country manager for the Philippines and Guam, said the “high uptake” of mobile use in the country could make it easier to reach the unbanked from across the archipelago and could prove more cost-efficient for financial service providers since physical presence would no longer be that necessary.
“There’s no question, we see a shift to mobile commerce... The reality is commerce is moving to the mobile phone. There are schools of thought that say because of your geographical setup, there are infrastructure challenges and again, 30% of your barangays don’t have access to physical brick-and-mortar banks, so we see technology like mobile leaping and bringing access to financial services quicker and faster,” Mr. Tomlinson said in an interview at the sidelines of the Oxfam-Visa event for the Innovative Electronic Cash Transfer Programme for Emergencies.
Credit and debit card penetration in the Philippines was at 11.4% in 2015 from 9.2% in 2010. Cash still accounts for bulk of transactions at 82.3%, although down from five year’s ago rate of 84.4% while bank transfer, direct debit and checks stood at 6.3%, also declining from 2010’s 9.2%, Visa earlier said.
“Clearly, there is opportunity for technology that brings access to financial products... just think about the fintech (financial technology) community and how they are developing very, very accessible interface in the mobile phone. Mobile commerce is a real and exciting opportunity and Visa ensures that we create a safe, secure payment environment when they use e-commerce,” according to the Visa official.
Moving forward, Mr. Tomlinson said Visa expects the growth in e-payments to continue, with the booming e- commerce industry in the country seen to boost digital transactions and the Bangko Sentral ng Pilipinas’ (BSP) push to shift to an electronics- based payment system under the envisioned national retail payments system (NRPS), which is seen to help promote financial stability and inclusion in the country.
“What Visa is doing is we’re building technologies to secure payments within the mobile phone, if you think about payments, we started out with plastic, and then e-commerce and they’re both sustainable so we don’t see any reason why mobile commerce wouldn’t be sustainable,” he added. “We are constantly investing in technology that will make sure transaction payments is safe, secure and well-protected.”
Pia Bernadette Roman-Tayag, head of the BSP’s Inclusive Finance Advocacy Staff, said that
the Philippines makes 2.5 billion payment transactions a month and “only around 1% are done electronically” while 99% are still settled either through cash or checks.
“We’re a very cash-dependent country. Our goal is to really make e-payments at least 20% [of total payments] by 2020,” the BSP official said in her speech during the same event, noting that the central bank is also working to utilize its planned NRPS since “cash is very expensive and cash is also not very safe... We hope to see more digital inclusion because what we see is promising figures. Technology has the promise to increase that.”
Mr. Tomlinson said that programs like the Electronic Payment Solution ( EPS) project it launched in 2015 with international humanitarian aid organization Oxfam — a simple platform that supports money transfers during disasters and national calamities which allows withdrawals from automated teller machines and partner remittance centers, over- the- counter purchases and purchases through mobile store set up 20 kilometers from the city — are stepping stones to grow electronic payment penetration in the country.
“As we bring people into the system, we lay the foundation for a deeper financial relationship. So when you go from prepaid, then you go to an account, so you have your own stored wealth. Then you move from savings to credit,” Mr. Tomlinson said.