THE PHILIPPINES could top other Asian countries in terms of payments digitalization in three to five years as more Filipinos go cashless, an official of a software company said.
“My belief is that in the next three to five years, they’re going to be near the top because you’ve got a whole generation that is basically migrating away from cash, and they’re going to demand digital experiences,” Boomi Asia Pacific and Japan Vice-President and General Manager Thomas Lai said in an interview with BusinessWorld.
Mr. Lai said the large amount of monthly remittances from overseas Filipino workers will drive demand for digital transactions.
He added that the seasonal increase in remittances that comes with the holidays will also help the central bank reach its financial inclusion and digitalization goals.
The Bangko Sentral ng Pilipinas (BSP) wants 50% of total retail transactions done digitally and to bring at least 70% of Filipino adults into the financial system by this year under its Digital Payments Transformation Roadmap.
Digital payments made up 30.3% of the total volume of retail transactions in the country in 2021, rising from from 20.1% a year earlier, amid increased adoption of online platforms due to the coronavirus pandemic.
Meanwhile, the value of payments done online represented 44.1% of total retail transactions last year, higher than the 26.8% share in 2020.
While the BSP’s end-2023 targets are aggressive, it could still get close to achieving it before the deadline, Mr. Lai said.
Beyond these targets, the central bank must also work towards ensuring the security of online transactions, he added.
“If you make them really easy and really secure, then more people will use them. What that means is the bank has a responsibility to ensure that the system is highly secure, high integrity, [and] if you will, high availability,” he said.
To include underserved sectors in the digitalization of payments, Mr. Lai said the public sector can partner with financial technology firms to boost infrastructure in far-flung areas.
“We can be part of the solution, but we’ve got to partner with the LGUs (local government units) and the infrastructure providers because a digital experience requires Internet access,” he said.
Focusing on micro, small, and medium enterprises will also boost inclusion, Mr. Lai added.
He said Boomi is looking to expand its presence in the Philippines, both in the public and private sectors
“We’re super excited to grow our presence in the market, and that’s being a part of the national drive to digitize,” he said. — A.M.C. Sy