eCommerce is Primed to Prosper in the Philippines
The Philippines is one of Asia’s most exciting and dynamic countries. In a population of almost 110 million people, about 60 million people are connected to the internet (World Factbook). Given the country’s young and growing middle class, merchants need to ensure their Philippine payment methods cater to consumer preferences in this rapidly evolving market.
- The B2C ecommerce market in the Philippines may be worth $12 billion by 2025.
- In 2019, Lazada was among the leading ecommerce sites in the Philippines, with more than 25 million website visits each month.
- However, Shopee is also very popular, with estimated monthly traffic of 36 million, according to September 2020 data (Statista).
The government is throwing its support behind ecommerce in the country too. The Philippine trade department wants to double the industry’s contribution to national GDP, from 10 percent to 25 percent by 2025 (UNCTAD).
Here are the Most Popular Payment Methods in the Philippines
Filipinos have historically preferred to use cash — but that’s changing. Recent research revealed digital payments accounted for only one percent of the country’s total transaction volume in 2013. But by 2018, digital payment volume rose to 10 percent corresponding to a 20 percent share in the country’s total transaction value (Responsible Finance Forum).
These Philippines Payment Methods are Most Popular Among Filipinos Today
Retail Bank Transfers
The Filipino government launched the National Retail Payment System (NRPS) in 2015. The NRPS paved the way for better B2B payments in the Philippines and created two automated clearing houses (ACH), PESONet, and InstaPay. Both companies enable fund transfer between any two accounts in the country. UN data shows PESONet and InstaPay have registered transactions worth a combined $4.6 billion since 2015.
BSP National QR Code Standard
Remarkably, the volume of QR transactions in the Philippines grew by almost 5,700 percent in the 12-month period to December 2020. Under its QR Ph program, the country’s central bank has recently launched person-to-person (P2P) payments with merchant payments set to follow (Business Inquirer). QR payments adoption is being driven partially by the pandemic.
Mobile wallets such as GCash, PayMaya and Coins.ph are the leading ewallet providers in the Philippines. Of this trio, GCash is the market leader, with three times the average downloads of its competitors, and almost a quarter of a million daily active users (YCP-Solidiance).
Cash and Over-the-Counter Payments
Despite the rise of a range of alternative payment methods, cash prevails in the Philippines. This is because the Philippines has more than 7,000 dispersed islands and more than 50 million people are unbanked (Asian Development Bank).
Merchants need to accept cash across every channel because options such as cash-on-delivery (COD) and over-the-counter (OTC) payments are highly popular. But the arrival of COVID-19 has forced a rethink on cash usage, with more and more Filipinos beginning to turn to contactless payment methods.
Local Payment Methods Drive eCommerce Success
More Filipinos will buy from merchants who provide a localized checkout experience and the payment methods they value. With payment preferences evolving and the government supporting an ambitious shift towards cashless commerce, merchants need much more than a one-size-fits-all approach.
Provide The Right Payment Experiences In The Philippines And Turn More Shoppers Into Repeat Customers.
“Asian Development Bank.” https://www.adb.org/countries/philippines/poverty#:~:text=Poverty%20Data%3A%20Philippines,day%20in%202019%20is%202.7%25.
“Business Inquirer.” https://business.inquirer.net/316989/digital-payments-surged-by-over-5000-percent-amid-pandemic-says-bsp-chief#ixzz6oU0skORf.
“Responsible Finance Forum.” https://responsiblefinanceforum.org/wp-content/uploads/2020/02/The_State_of_Digital_Payments_in_the_Philippines-Feb20.pdf.
“World Factbook.” https://www.cia.gov/the-world-factbook/countries/philippines/.