THE Bangko Sentral ng Pilipinas (BSP) has exceeded its goal of digitalizing 50 percent of retail payments by the end of 2023, on Tuesday reporting that the share had surged to 52.8 percent from 42.1 percent a year earlier.
“From a mere 10 percent in 2018, the volume of retail payment transactions has grown exponentially to 52.8 percent in 2023, surpassing the target set forth in the BSP DPTR (Digital Payments Transformation Roadmap) 2022-2023,” the central bank said in a report.
“Out of five billion monthly transactions, more than 2.6 billion transactions were successfully converted into digital form representing a substantial 28.1 percent increase from the previous year,” it added.
BSP Deputy Governor Mamerto Tangonan. Photo from Bangko Sentral ng Pilipinas FB page
In value terms, the share of monthly digital payments to total transactions increased to 55.3 percent, or $110.44 billion, from 40.1 percent in 2022.
The surge was said to have been mostly driven by the adoption of online merchant transactions, person-to-person remittances and supplier payments made by businesses.
Merchant payments accounted for 64.9 percent of monthly digital payments, person-to-person transfers took 19.3 percent and business-to-business supplier payments were at 6.1 percent, the BSP said in a statement.
“This is consistent with the growth in ownership of transaction accounts, which are mostly e-money accounts that are increasingly used for payments,” it added.
BSP Deputy Governor Mamerto Tangonan said the value of digital transactions amounted to P6.1 trillion and were “predominantly driven by high-frequency, low-value retail transactions such as merchant payments and person-to-person transfers.”
He noted an increase in account-to-account transfers compared to card payments and credited this to the PESONet and InstaPay e-payment systems.
Tangonan said the BSP was aiming for a 60- to 70-percent share of digital payments to total retail payments over the medium term.
“Together with the payments industry, we will continue to promote existing digital payment streams such as PESONet, InstaPay, QRPH and Bills Pay PH until they become the preferred mode of payments in the country,” he added.
Meanwhile, BSP Governor Eli Remolona Jr. said that having exceeded the target was “proof that our pursuit of a cash-lite economy has consistently been progressing.”
“As we serve their payment needs and deepen financial inclusion, we are ready to bring digital finance to new heights,” he added.
Tangonan said the primary challenges involved expanding the user base and converting nonusers by “addressing the chief constraints that keep them from using digital payments … [of which] the number one is the costs.”
“We have to work with the industry to achieve that,” Tangonan said.
Increasing consumer trust in digital payments is also crucial, he added, and will only be achieved by “enhancing our anti-fraud measures and initiatives to protect the consumers and so they gain more trust and comfort in the use of digital payments.”
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