THE country’s two major mobile wallet providers, PLDT Inc.’s PayMaya Philippines and Globe Telecom Inc.’s GCash, have seen a significant shift to contactless payment by consumers and businesses during the quarantine period, and expect this to be sustained in line with the government’s target of more than 50 percent digital transactions by 2023.
The two mobile wallet providers have seen transaction volumes more than double during the enhanced community quarantine (ECQ) as compared to the previous quarter, driven by increasing use of e-payment for bills payment, fund transfer and online purchases.
Digital payment adoption is seen to further accelerate with the government’s recent mandate to use contactless payment schemes in taking public transportation such as buses, trains, taxis and transport network vehicles services.
This is to minimize direct physical transactions in compliance with social distancing measures ordered by health authorities.
Cash aid disbursements are also being done through mobile wallets.
Globe through its unit Globe Fintech Innovations Inc. (Mynt), operator of GCash, said the GCash App saw a 200 percent increase in the number of installations from March 15 to April 15, and a 250 percent growth in the number of app registrations for the same period, making it one of the top five most downloaded apps in Android.
This surge was driven primarily by the people’s need for contactless alternatives to sending money and paying bills.
Pebbles Sy, GCash chief technology and operations officer, told Malaya Business Insight GCash saw a 70 percent increase in transaction volume in the second quarter this year versus previous quarter, driven by the growing volume in sending money, online payment and cash-in from banks.
New GCash users also doubled month-on-month since the start of the ECQ, Sy added.
“GCash is complementing the new normal ‘Stay At Home’ Lifestyle. The lockdown situation opened up an opportunity for online services, especially digital financial services, as more consumers shift to online for their safety. As cashless becomes more relevant, we expect that the Philippines will be closer to BSP’s (Bangko Sentral ng Pilipinas) goal of having 20 percent of transactions being cashless by 2020,” Sy said, giving her outlook on the adoption of mobile wallet in the Philippines.
PayMaya, a unit of Voyager Innovations Inc., is also seeing strong and accelerated growth in digital payment transactions in the country, as people look for convenient, fast, safe and hygienic alternatives to cash, said Shailesh Baidwan, PayMaya president.
“Similar to the internet where many Filipinos leapfrog to mobile-first, for financial services, we are seeing a jump to e-wallet-first as an entry point to have a financial account. BSP Governor Benjamin Diokno said earlier this month that the country will likely reach the target of 50 percent of all payment transactions by 2023 and we believe this is attainable and will most likely come sooner because of the accelerated adoption,” Baidwan told Malaya Business Insight.
“We fully support this vision and we are excited for the benefits that this will bring to all Filipinos, as quarantine restrictions ease up and with the government mandating the use of digital payments in retail establishments, transportation and government services,” he added.
In the first quarter this year, PayMaya posted year-on-year accelerated growth across its synergized businesses — PayMaya Consumer, PayMaya Enterprise and Smart Padala — due to its successful “Cashless for All” campaign.
PayMaya transactions and total volume more than doubled from a year ago. This accelerated growth trajectory has been sustained even as the country deals with the effects of the coronavirus pandemic and the resulting ECQ measures.
“We have seen this significant shift first-hand at PayMaya. Our total volume has doubled year-on-year and we see strong continuous growth across businesses — from consumer wallet, to enterprise acquiring, to Smart Padala domestic remittance. Registrations to the PayMaya app have continuously grown strongly as Filipinos look for the fastest and most convenient means to access financial services especially for sending money,” Baidwan said.
The government’s push for digital payments also helps build trust towards these payment platforms — be it for disbursement of cash assistance, acceptance of payments for taxes and fees, social security contributions, use of cashless for transportation sectors, and many others, he added.
“Our average volume of transactions per day in May is significantly higher compared to pre-ECQ as restrictions on mobility and business operations are starting to ease. An example is for eCommerce. Right after the ECQ, volumes went down because of operational restrictions. But now, average volume of transactions have more than doubled in May as compared to March,” Baidwan said.
With businesses pivoting to e-commerce through their websites or through “conversational commerce” via Facebook Messenger and other apps, more PayMaya users are also ordering online and arranging for deliveries.
For example, top food ordering and transport/delivery merchants are seeing strong growth, more than double the average volume of transactions in May as compared to March, PayMaya said.
Meanwhile, a Colliers International survey showed the cash-on-delivery payment option for online purchases was also popular, with 65 percent of the respondents opting for it. Only 7 percent preferred to use online bank transfers and e-wallet options.
“Colliers sees this preference gradually shifting to InstaPay and e-wallet options given the rising popularity of e-payments due to their convenience and accessibility,” Colliers said.
Data from the Philippine Payments Management Inc. showed that e-payment transactions during the lockdown, covering the period of April 2020, reached a total value of P53 billion or an average of P6,130 per transaction.
In April, some 8.9 million InstaPay transfers were recorded, up by 32.2 percent from P6.7 million transactions in March this year.