Digital adoption in the Philippines is rising faster than the global average, driven by increasing social media penetration and the e-commerce market, according to Economist Intelligence Unit’s latest study.
This developed as electronic commerce (e-commerce) stakeholders noted the planned imposition of tax on e-commerce transaction should redound the benefit of consumers and businesses.
The report on “New Dimensions of Change: Building Trust in a Digital Consumer Landscape” done by Economist Intelligence Inc. and sponsored by TransUnion said digital adoption is generally perceived as rising faster in the Philippines at 64 percent, compared with the global average of 54 percent digital adoption rate.
The report said the super-apps and digital wallets will become the dominant portal for digital commerce in the next five years in the Philippines, perhaps as a result of strong growth in mobile phone usage – the penetration rate has risen from about 37 percent in 2015 to an estimated 69 percent in 2020.
Executives in the Philippines believed that super-apps and digital wallets will hold great potential for corporate revenue over the next five years.
At the same time, the biggest obstacle to super-apps going mainstream are regulatory limitations on data sharing and concerns related to security, privacy or fraud, the study noted.
“But all of this digital progress will be wiped out if we can’t remove these barriers to building bilateral digital trust. For instance, 70 percent of Philippine executives in the study who said their company changed their digital transaction process as a result of the pandemic experienced glitches,” said Pia Arellano, TransUnion Philippines president and chief executive officer.
Nearly 84 percent of Philippine and 85 percent of global executives surveyed as part of the study said they believe smooth transactions are “essential to business survival” rather than merely a competitive edge during and after the pandemic, the findings showed.
Approximately 92 percent of Philippine and 85 percent of global executives say biometrics are likely to be used to authenticate the vast majority of payments in the next 10 years.
About 46 percent of Philippine and 43 percent of global respondents noted improved fraud detection and security as the greatest benefit to using artificial intelligence. This was the top selection by far, with smoother customer experience being the second most used answer globally at 29 percent worldwide and 23 percent in the Philippines.
Meanwhile, Martin Cu, Ninja Van Philippines country head said transaction tax on e-commerce is potentially good if government reinvests the money collected to the benefit of all stakeholders.
In a press briefing, Cu said the “tax should help facilitate the growth of the e-commerce industry as a whole, help facilitate the entry of more businesses, allow businesses to organize and formalize themselves in a more productive way.”
But Cu admits the tax would add to the cost for consumers and businesses as it makes goods and services more expensive.
“There’s definitely some give and take here. It’s necessary for sure. We have to find a way to enable and facilitate this … every mature market in the world has some version of this, but it also has to be implemented in a way that will still enable the facilitation and growth of this nascent ecommerce industry,” Cu added.
In the same event, Frederic Levy, GCash chief commercial officer, concurred there should be a delicate balance in this proposal especially most of the companies in the industry are still in very active investment process and that the momentum of e-commerce has been established.
Levy said whatever amount of tax shluld not break that momentum. (M. Iglesias and I. Isip)