In early history, payments were done through bartering, an exchange of goods, which were later done through a token that held economic value. These modes of payment also had its own challenges: from trying to transport goods from one place to another as well as trying to avoid meeting thieves and robbers on the way to work.
In the 1970s, the magnetic strip-equipped credit card began to circulate in the United States but it wasn’t until 1982 that Filipinos had their own credit card which was issued by the Philippine Commercial Credit Card.
This advancement started the first wave of cashless payment options in the country and several milestones were also made in the local credit card industry such as:
In 2001, Smart Communications, Inc., a provider of telecommunications services, was the first to introduce digital payments in the country. The Philippines was one of the first countries to pioneer digital payments with the launching of mobile money.
The platform allowed Filipinos to pay their bills, purchase products, load their prepaid cards as well as transfer money with just the use of one’s mobile phone. Even with its convenience, its adoption and its use had been limited.
In 2015, over 98% of payment transactions in the Philippines were still done in cash unlike that of the United States and Australia which used cash in just 57 and 61 percent of all transactions respectively. This urged the Philippines to dedicate itself to changing its economy from cash-intensive to cash-lite.
In 2018, the growth of digital payments was due to the increased investment in fintech companies. With this advance, Bangko Sentral ng Pilipinas (BSP) teamed up with banks for its National Retail Payment System (NRPS) program, which aimed to increase electronic payment use through smooth, convenient, accessible, and safe transfer of funds between banks and electronic money accounts.
In a recent study done by Visa Philippines, titled “Consumer Payment Attitudes,” it had shown that Filipinos had an interest in cashless transactions and concluded that the challenge in becoming absolutely cashless is the lack of confidence in lasting a few days without cash transactions (as it has been a cash-based country for many years).
A majority cashless transactions in the country are mainly in the form of transport, grocery, and retail sales. By that point, the study indicates that it may not be so much about what is spent, but where it is spent that is driving the cashless payment system. What enabled cashless transactions to gain momentum in the Philippines is the growing success of one business platform: e-commerce or Internet-based business transactions and additionally, the current pandemic.
The prospect of the Filipinos going cashless is exciting and there is a lot of space for progress. Organizations like Visa Philippines recognize the need for market analysis, to map growth on this front, to come up with the ideal solutions that will advance payment processes in the Philippines.
More than ever, contactless payment systems are being used and discussed. It will only be a short amount of time before cashless transactions shift from the payment trend to the chosen payment form of the future.
A big step that will help your business go cashless is a great payment integrator like GiyaPay! This is a service that provides a lot of benefits and makes payment transactions so much easier for everyone. GiyaPay is an easy-to-use online payment solution that unifies a variety of online payment gateways into one payment button. It aims to provide easy set-up with a simplified user journey for the payor and consolidated reports for the business.
You can learn more about the service by going to https://giyapay.com. GiyaPay can be your complete payment solution!
Some businesses devoted much effort to transition into e-commerce to thrive despite the 2020 health crisis and payment integrators can make the process much easier.
Learn why cashless is thefuture of payments and how it improves the way you handle money.
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