E-money transactions jump 61% to P2.39 trillion in 2020

(The Philippine Star), 9 Jun 2021

MANILA, Philippines — Electronic money transactions processed by banks and financial technology providers jumped by almost 61 percent to P2.39 trillion in 2020 from P1.49 trillion in 2019 as the shift to digital payments from the traditional mode of cash transactions accelerated amid the pandemic.

Melchor Plabasan, director of the Technology Risk and Innovation Supervision Department at the Bangko Sentral ng Pilipinas (BSP), said fund transfers accounted for the bulk or 49 percent total of e-money transactions in 2020.

Plabasan said electronic fund transfers were followed by bills payments, with a share of 26.9 percent and merchant payments, with 10.3 percent.

“The COVID-19 pandemic has been a catalyst for the surge in digital payments usage in the country as physical distancing measures and quarantine protocols drove the demand for a contactless economy,” he said.

Data showed the volume of e-money transactions processed by banks and electronic money issuers (EMI-others) surged by more than 160 percent to 1.65 billion in 2020 from 630 million in 2019.

“This was due to the state of their digital transformation enabling them to effectively reach their target market,” he explained. As of April this year, there were 29 bank EMIs and 32 non-bank EMIs registered with the BSP.

Based on the e-Conomy Southeast Asia 2000 titled “At full velocity: Resilient and Racing Ahead” conducted by Google, Temasek and Bain & Company, nine in 10 new digital customers intend to continue using digital services going forward.

The study showed 37 percent or one in three of all digital service consumers last year were new to the service due to the COVID-19 pandemic.

The report said the digital economy of the Philippines is seen growing to $28 billion by 2025 from $7.5 billion in 2020.

“In line with the study of e-Conomy SEA 2020, we believe that in the short-term, there is an expected shift from the traditional mode of cash transactions toward digital payments,” Plabasan said.

He said growth would be driven in part by companies continuing to pursue digital transformation and explore new ways to reach targeted market segments.

He said empowering domestic micro, small and medium-sized enterprises (MSMEs) engaged in e-commerce would be both an end and a means to develop an inclusive digital landscape, conducive for both card-based and other electronic payment channels.

“The spread of e-money products is also expected to continue growing as both merchants and consumers increasingly show confidence with the technology and as mobile phones remain a viable and preferred payment channel,” Plabasan said.

Under the central bank’s three-year digital payments transformation roadmap, BSP Governor Benjamin Diokno has committed to shift half of total retail transactions to digital channels and increase the number of Filipino adults with bank accounts to 70 percent by 2023.