More than half of retail payments in the Philippines will be done digitally this year amid the growing adoption of online solutions, Filipino financial technology (fintech) firm Mochi said.
Mochi, a startup that specializes in invoicing and billing solutions, said in a statement on Monday that they see continued growth in digital payments this year.
“The projections of Philippine-based fintech startup Mochi suggest that 67% of retail payments in the country will be digital this 2024. This figure was derived from the 43% average year-on-year growth rate of digital retail pay-ments from 2019 to 2022 released by the Bangko Sentral ng Pilipinas (BSP) while considering the post-pandemic slowdown of said growth rate,” the company said.
The increased adoption of online payment solutions, the expansion of small and medium enterprises (SMEs), and the recovery in economic activity following the coronavirus pandemic will drive digital payments, Mochi said.
“Digital payments remained strong post-pandemic despite the slowdown,” Mochi Co-Founder and Chief Executive Officer Yroen Guaya Melgar was quoted as saying.
“With more than 90% of businesses in the Philippines being small businesses, it’s no wonder they’ve become champions of the digitization of financial services,” she said.
Based on latest data from the BSP, the share of online payments in the total volume of retail transactions in the country rose to 42.1% in 2022 from 30.3% a year earlier.
The total payment volume stood at 4.85 billion in 2022, with those done via digital platforms totaling 2.04 billion transactions. The top contributors for the increase in volume were merchant payments, person-to-person trans-fers, and salaries and wage payments.
According to central bank officials, the country was on track to meet its goal to have 50% of total retail transactions done digitally at end-2023. The next digital payments report of the BSP will be released in July this year.
However, the rise in online payments may also negatively affect SMEs as digitalization calls for these firms to be vigilant against fraud, miscalculations, and productivity bottlenecks, Mochi said.
“As an accounts receivable platform, Mochi is excited to help more SMEs manage the growing number of digital payments that they are receiving,” Ms. Melgar said.
“With digital invoice creation, integrated payment channels, and automated reminders, SMEs can be assured that the digital payments they are receiving will be more easily managed,” she added.
Under the Philippine Development Plan, the government wants 60-70% of retail payment transactions done online by 2028. — K.B. Ta-asan