Philippines: 1 trillion pesos in e-cash transactions

TRANSITION TO DIGITAL CASH: GCash, the top e-wallet in the Philippines, is quietly ushering in a transition towards digital payments. Even in rural areas, paying for groceries and medicines via GCash, or its main rival PayMaya, has increasingly become more common. With the pandemic, it has ushered in a spike in cashless, contactless and fast transactions — to the tune of at least Php1 trillion ($20 billion) in 2020.

SPIKE IN CASH-LESS TRANSACTIONS: Despite the low credit card penetration rate, or perhaps because of it, digital payments are spiking in the Philippines, helped in some ways by the coronavirus pandemic.

CASH IS KING? Most Filipinos still believe that “Cash is King.” That may no longer hold true going forward, with the rise of e-payments. The World Bank says fewer than one in 50 Filipinos are credit card owners. On the other hand, four in 10 internet users transact with e-wallets in the Asian country, wallets are bypassing a plastic money-based transactions.

TOP E-WALLETS: In the Philippines digital payments scene, the pole position belongs to GCash (of Globe Telecom) followed by PayMaya (mobile wallet entry of Globe's rival telco company, PLDT). Others include CoinsPH, GrabPay, PayPal, 7-Eleven CLIQQ Rewards, BanKO, and Moneygment. The ranking is based on downlaods for finance apps on the App Store and Google Play downloads. BSP, the country's central bank, has set a target of 30% increase in digital payments by 2020, by roping in more consumers, SMEs and government through simple, safe solutions. The Smart Padala agent network is also part of that ecosystem.

PANDEMIC BOOSTS DIGITAL CASH: A night-time scene at the 170-acre (67-hectare) Mall of Asia complex, the region's biggest retail destination. The seaside district fronting Manila Bay hosts numerous fulfillment and "call centres". The ease and convenience e-wallets offer have ushered in the digital economy in the Asian country. The pandemic also boosted contactless transactions — to the tune of Php1 trillion ($20 billion) in 2020 for GCash alone.

MEDICAL SERVICES: PCR tests and health services, are increasingly being drawn into the e-wallet space, bypassing the plastic money payment infrastructure. e-wallets allow the economy and healthcare systems to move faster, safer: for example, PCR tests for travellers can now be only paid in digital currency, mostly via GCash in the Philippines.

TRADITION AND GROWTH. E-commerce has seen an unprecedented growth over the last five years in the Asian country. A lone "calesa" in a sea of internal-combustion-engine vehicles serves tourists in Manila. Payment of road tolls (E-pass) as well as of bills have also increasingly gone digital.

DISRUPTING TRANSPORT: This EV charger next to a McDonalds shop in Manila accepts both cash and e-wallet payments.

DIGITAL PAYMENTS FOR TAXIS: Grab, the Southeast Asian region's leading ride-hailing app, accepts credit card payment, but many users still pay in cash. The QR code payment system, however, is pulling an increasing number of adherents.

MERCHANTS: Ministop and 7-11 are two of the more popular convenience stores in the country wired up for e-wallet transactions. According to GCash CEO and president Martha Mazon, over 600,000 merchants and online sellers had set up shop and used the facility during the pandemic — making the mobile wallet the dominant primary mode of payment. For shopping, buyers spent over Php6 billion on e-commerce websites in the Philippines via GCash. Banking services are also increasingly moving from face-to-face, brick-and-mortar mode to digital.

SAVING, BORROWING, DONATING: GCash has also become a way to save, borrow and donate funds. As of November 2020, there were 3 million GSave accounts opened. Meanwhile, over P8 billion was loaned to more than 900,000 Filipinos through GCredit in 2020. Giving to charity has also started going digital. Filipinos used the mobile wallet to donate over P40 million for relief operations in 2020. A street food scene along Roxas Boulevard.

SAFE AND SANE: E-wallets kept “Filipinos safe and sane during the pandemic,” said Sazon. Users donated more than P40 million for COVID-19 and typhoon relief in 2020. A scene inside a Quiapo-bound "Jeepney", with makeshift separators between passengers made of plastic. Last-mile transport in the Philippines is still predominantly a cash-based affair.

GREEN CASH: “GCash Forest”, which now has over 6.7 million users, also collects “green energy” points, which can be used to plant a tree in forest and watersheds. The World Wide Fund for Nature Philippines recently completed the reforestation of 75 hectares in Ipo Watershed through the adopted trees of GCash Forest, the company reported. Trees line the streets of Manila. Photo shows a scene on Roxas Boulevard.

BLOCKCHAIN TECHNOLOGY: Mynt, which operates GCash, is a partnership between Globe Telecom (owned by the Philippines’ Ayala Corp and Singpore’s Singtel), and China’s Ant Financial. Cash is seen being rapdily disrupted by the likes of Ant and other blockchain-powered financial platforms, due to the inherently high "velocity" of money, relative safety, convenience and lower transaction costs. Photo shows a foreign exchange shop in Malate, a district of the Philippine capital Manila.

PLATFORM: Ant Financial is an affiliate of Jack Ma’s Alibaba Group. Ant’s blockchain is today China’s largest blockchain platform, which can handle 1 billion user accounts and 1 billion transactions per day. It has topped the global ranking for blockchain patent applications for the past three consecutive years.