Payment cards, more commonly known as plastic money and which include credit, debit and postpaid cards, have entered the Philippine financial system quite recently after the low uptake of the past five years.
More Filipinos have now started to use credit cards for convenience and safety rather than bringing cash. Banks offering such products also offer additional benefits such as accumulation of points, rebates and some other perks and discounts to encourage the use of plastic money.
In fact, the 2014 Consumer Payment Attitudes Study commissioned by Visa revealed that four out of 10 Filipinos carry more payment cards in their wallets and that about five in 10 want to do away with cash. This means that Filipinos are frequent users like its neighboring countries such as Singapore, Malaysia and Thailand.
The same study showed that the attitude towards using payment cards is a “positive sign” for the country’s electronic payment landscape. Apart from this breakthrough, a revolution in mobile phone technology—which has gone far beyond its usual functionality—paved the way to maximize financial transactions such as mobile banking and mobile payments. At the core of this is the rural banking industry, the main proponent of mobile banking in the country.
Rural banks do not only utilize the advantages of cellular phone-based banking in order to hurdle geographical barriers for the industry and to deliver services to clientele in far-flung areas. They have also started taking advantage of Filipinos’ willingness to transact through automated teller machine (ATM) cards. Last year, the entire banking industry processed about 217 million electronic banking transactions valued at P348 billion.
Rural banks are now investing in such technological shifts as evidenced by the growth in the number of ATMs within the industry. Among the banking sectors, rural and cooperative banks posted the biggest growth in the number of ATMs, with 391 onsite and 48 offsite ATMs.
A new report by the World Bank Development Research Group, funded by Better Than Cash Alliance and the Bill and Melinda Gates Foundation and titled, “The Opportunities of Digitizing Payments,” showed that the “rapid development and extension of digital platforms and digital payments can provide the speed, security, transparency and cost-efficiency needed to increase financial inclusion.”
Innovating is part of the rural banking industry’s efforts towards the goal of financial inclusion. It has taken several steps to develop programs that contribute to the endeavor, in the hope of spurring growth in the countryside.