Consumer payment transactions continued to be dominated by the use of cash in the Philippines in 2019 due to the high proportion of unbanked population, although the government is determined to double the banked population by 2023. However, financial inclusion is steadily growing, supported by the improved presence of financial institutions and the increasing number of banks such as Bangko Sentral ng Pilipinas (BSP)/Central Bank, which is creating a high number of “branch-lite” offices that are placed in areas that are underserved to reach a greater proportion of the underbanked population.
The local government’s goal for the Philippines to achieve 20% cashless transactions by 2020 is increasing the drive towards greater digitalisation in the country with technology such as contactless smartcards and particularly digital wallets gaining in popularity. This aim is being supported by both traditional card-issuing banks and dynamic digital players and fintech companies, paving the way for the strengthening use of online banking, a cashless ecosystem and the move towards interoperability.
To support the government’s aim to reduce the country’s reliance on cash transactions, it has launched a number of initiatives over the review which are starting to find success through InstaPay and PESONet. Using the National Retail Payment System (NRPS) of BSP, the government aims to make fund transfers between banks and non-banks (e-money issuers) easier.
Financial cards experienced major disruption linked to the rapid emergence of digital players in 2018, with former leading issuer of cards BDO Unibank, falling several positions and suffering loss of share in the number of cards in circulation. However, it retained its convincing lead of card payment transactions due to its strength in credit cards, which holds the highest value share in transaction terms within financial cards.
The number of financial cards will continue to record solid growth over the forecast period, driven by ongoing strong demand for pre-paid cards, despite the rising penetration of m-commerce and digital wallets and the latter’s impressive predicted performance. This will be supported by the efforts of players to attempt to aggressively acquire customers, particularly the high proportion of unbanked Filipinos, although the challenge for them is to translate this increase to actual usage in cashless transactions.
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Discover the latest market trends and uncover sources of future market growth for the Financial Cards and Payments industry in Philippines with research from Euromonitor's team of in-country analysts.
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