1h Free Analyst TimePayments Landscape in the Philippines: Opportunities and Risks to 2022
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Cash remains the most popular consumer payment instrument in the Philippines, accounting for 99.4% of the country’s total payment transaction volume in 2018. This is mainly due to the high unbanked population, inadequate banking infrastructure, limited public awareness of electronic payments and low acceptance of payment cards at merchant outlets.
However, with concentrated efforts by the Filipino government and the Bangko Sentral ng Pilipinas (BSP) - the country’s central bank - the share of cash is anticipated to decline gradually over the forecast period (2018e-2022f). As part of the government’s financial inclusion plan, a number of micro-banking offices, electronic money issuers, microfinance providers, pawnshops and remittance agents are being employed to provide access to financial services in un- or underserved areas. To increase its banking presence in rural areas, the BSP approved a regulation in April 2015 under which processing fees for establishing new branches in these areas are waived. Furthermore, driving credit card transactions are monthly installment facilities and pricing benefits, such as annual fee waivers, reward programs and cashback.
In an effort to boost electronic payments, in April 2018 the BSP launched an instant payment service - InstaPay - under the National Retail Payment System (NRPS) framework. The service is available 24/7, 365 days a year. Users can transfer funds of up to PHP50,000 ($999.11) per transaction in a day. The service can be used by individuals, businesses and government agencies with savings, current or e-money accounts with participating banks. Currently, InstaPay can be accessed via mobile banking apps or internet banking services; access via other digital channels will be rolled out gradually
Consequently, the number of payment cards in circulation, transaction volume and transaction value recorded a robust CAGR during the review period (2014-18e) - a trend that is anticipated to continue. Debit cards have the highest transaction value in the country, followed by credit and charge cards. The emergence of contactless technology and growth in the e-commerce market are also anticipated to support payment card market growth.
The Philippine e-commerce market is one of the fastest-growing in Southeast Asia, increasing from PHP60.2bn ($1.20bn) in 2014 to PHP158.2bn ($3.16bn) in 2018, at a robust review-period CAGR of 27.3%. To increase use of payment cards for e-commerce transactions, banks are offering exclusive cards for online purchases. Banks are also offering virtual cards specifically for online shopping.
The report "Payments Landscape in the Philippines: Opportunities and Risks to 2022" provides top-level market analysis, information and insights into the Filipino cards and payments industry, including -
- Current and forecast values for each market in the Filipino cards and payments industry, including debit, credit, and charge cards
- Detailed insights into payment instruments including cash, cards, and cheques. It also, includes an overview of the country's key alternative payment instruments
- E-commerce market analysis
- Analysis of various market drivers and regulations governing the Filipino cards and payments industry
- Detailed analysis of strategies adopted by banks and other institutions to market debit, credit, and charge cards
Companies mentioned: Banco de Oro, Land Bank of the Philippines, BPI, Metrobank, Rizal Commercial Banking Corporation, EastWest Bank, Citibank, HSBC, Maybank, BancNet, Mastercard, Visa, Megalink, American Express, JCB.
- In an effort to boost electronic payments, in April 2018 the BSP launched an instant payment service - InstaPay - under the National Retail Payment System (NRPS) framework. The service is available 24/7, 365 days a year. Users can transfer funds of up to PHP50,000 ($999.11) per transaction in a day. The service can be used by individuals, businesses and government agencies with savings, current or e-money accounts with participating banks. Currently, InstaPay can be accessed via mobile banking apps or internet banking services; access via other digital channels will be rolled out gradually. At the time of launch, there were 20 financial institutions supporting InstaPay.
- To transform the country’s payment system and increase the acceptance of electronic payments, the BSP introduced the Philippine EFT System and Operations Network (PESONet) in November 2017. This is a batch-based electronic credit transfer system facilitating business-to-business (B2B), customer-to-business (C2B), government-to-government (G2G) and person-to-government (P2G) transactions in the country. It is the first automated clearing house in the Philippines under the NRPS that enables all Filipinos to perform electronic credit transfers. Under the system, funds are made available to the recipient instantaneously upon clearing or on the same banking day; recipients are not charged electronic crediting fees. As of November 2018, a total of 47 financial institutions had integrated with PESONet.
- To foster healthy competition in the Filipino credit card market, in May 2018 the BSP approved the new Philippine Credit Card Industry Regulation Law, intended to ensure safe, efficient and fair business conduct. The law comes with Implementing Rules and Regulations (IRR) that are set to allow new players, other than banks, their affiliates and subsidiaries, into the credit card market. The entry of new organizations is expected to result in transparent and competitive interest rates, innovative products and enhanced services. In addition, the new IRR tackles customer concerns associated with credit cards, including the transparency of charges and fees, unfair collection practices, immediate payments posting, consumer data confidentiality, and the fast resolution of complaints and disputed transactions.
Reasons to Buy
- Make strategic business decisions, using top-level historic and forecast market data, related to the Filipino cards and payments industry and each market within it.
- Understand the key market trends and growth opportunities in the Filipino cards and payments industry.
- Assess the competitive dynamics in the Filipino cards and payments industry.
- Gain insights into marketing strategies used for various card types in the Philippines.
- Gain insights into key regulations governing the Filipino cards and payments industry.
Table of Contents
- Market Overview
- Executive Summary
- Card-based Payments
- E-commerce Payments
- Alternative Payments
- Payment Innovations
- Payments Infrastructure & Regulation
A selection of companies mentioned in this report includes:
- Banco de Oro
- Land Bank of the Philippines
- Rizal Commercial Banking Corporation
- EastWest Bank
- American Expresss