The latest report of the Bangko Sentral ng Pilipinas (BSP) confirmed that the BSP achieved its target of reaching 20% of digital payments volume by 2020. The report reveals that as of the end of 2020, 20.1% of monthly payments volume was conducted digitally. This is a substantial improvement over six months from 2020’s first semester estimates, which pegged digital payments volume at 17%. The value of digital payments also grew from 25% to 26.8% over the same period.
The increase in digital payments was largely driven by high-frequency, low-value retail transactions such as person-to-merchant payments and person-to-person (P2P) payments such as electronic fund transfers.
The health protocols that entailed social mobility restrictions in response to the COVID-19 pandemic also emerged as a strong catalyst for the wider adoption of digital payments in the country. More consumers are becoming digitally engaged and have adapted to the use of digital tools for their financial transactions, as shown by the sustained rise in the volume and value of merchant payments and remittances.
By the end of 2020, merchant payments surged by 47.8% in volume or an increase of 250.2 million transactions compared to the previous year. Significant contributors to the overall rise in digital payments volume include remittances which grew by 18.1%, due to the wider usage of wallet-to-wallet electronic fund transfers, and government-to-person (G2P) salaries and payroll transactions, which registered an increase of 21.1% due to the shift from cash to digital payments of salaries by government institutions.
With the close collaboration of the BSP with key stakeholders from the government and private sector, as well as the payments industry led by the Philippine Payments Management, Inc. (PPMI), the digitalization of new payment streams can be timely implemented to further accelerate the usage of digital payments throughout the country. With these developments, the BSP is optimistic that it is well on its way to achieving the strategic objectives set out in the BSP Digital Payments Transformation Roadmap of providing safe, affordable, and convenient payment services that cater to diverse needs of the country’s increasingly digital economy.
(Sources: Bangko Sentral ng Pilipinas; Philippine Daily inquirer)