Filipinos with bank accounts prefer electronic payments instead of cash with actual usage
and interest in such technologies predominant, a Visa study showed.
While cash transactions remain the most widely used in the country as over two thirds of the population is unbanked, the Visa Consumer Payment Attitudes Study 2015 showed that alternative payment options were gaining recognition.
Among those with bank accounts, about 70 percent of the Generation X respondents—those aged 35 to 60 years old—“have a penchant for electronic payments . . . for safety reasons”, while 60 percent of the Generation Y—those aged 18 to 34—also prefer card transactions over forking out cash.
The Visa study surveyed attitudes towards payments among Southeast Asian consumers and Stuart Tomlinson, Visa country manager for the Philippines and Guam, described the shift in the Philippines as favorable for domestic businesses.
“We see widespread adoption among high-spending Gen X towards digital payments, particularly mobile, and growing spending power among Gen Y. The demographic shifts provide ample opportunities for businesses and financial institutions, spurred by fast-developing innovation in payments, such as wearable technology,” Tomlinson said.
Visa said more Gen X and Gen Y individuals were becoming interested to shop in stores and pay with mobile devices—82 percent and 78 percent, respectively—because cashless transaction save time, are relatively easy to conduct and do away with the need to carry bulky cash.
Visa said 88 percent of the Gen Y individuals surveyed were already using mobile applications to conduct online purchases while 76 percent of the Gen X were also doing the same. The latter, it said, are “catching up quickly.”
The Visa study also cited that interest in using “wearables” for payments, or high-tech devices tapped at point of sales terminals, were heightening at 80 percent among the Gen X and 87 percent among Gen Y wanting to try it. Examples of wearables are the Apple Watch or any other device that works with contactless chips.
The top three purchases using wearables are groceries, food and beverages, and movie tickets, the study noted.
Purchases via mobile apps, meanwhile, are increasing as 43 percent among the Gen X bought event and concert tickets, higher than the 23 percent among the Gen Ys, given their higher purchasing capacity.
The younger Gen Ys, meanwhile, spend more on software, apps and app-related content (52 percent) than the elder Gen Xs (28 percent).
“Given the appetite of Gen X and its spending power, catering solely to the young millennials would be too limiting,” Visa said.
The financial services firm, Tomlinson said, was working with client banks and merchants to accelerate the speed and scale of financial innovation “so everyone, everywhere can have the best means to pay and get paid.”
According to a 2014 World Bank study, only 31 percent of Filipino adults have bank accounts, with the country lagging behind its Asean peers.
The Philippines is tied with Vietnam, while neighbors such as Malaysia and Thailand have significantly higher rates of 81 percent and 78 percent, respectively.