Whether it was the carryover of the pandemic or other factors, Filipino consumers have fully embraced the use of e-wallets, according to the latest report from Nomura Research Institute (NRI) Manila. This is amid the alleged hacking and scam issues that hounded the fintech industry, specifically the e-wallet or mobile payment sector.
Based on a survey by NRI among 477 e-wallet users in Metro Manila, 41% (195) experienced issues in the last six months. Most of the issues are related to technical challenges with 53% of respondents noting that they have experienced multiple and unplanned downtimes, while 44% and 38% of the respondents expressed difficulty in receiving one-time passwords (OTP) and in opening the app, respectively.
“We hypothesize that this behavior is largely driven out of necessity and convenience,” the Institute said in a media advisory. “The use of e-wallet has already become integral to consumers’ lives, motivated by wider adoption of e-commerce and digital financial platforms in the Philippines.”
Filipinos spent 4.4 million hours using e-wallet apps in 2022
M Lhuillier now offers cash-in and cash-out services to GCash users
NRI was established in 1965 as Japan’s first private think tank. Since then, NRI has been a leading research and consulting firm with more than 17,000 people worldwide. The Manila branch has been supporting country development as well as business development and transformation of various organizations in the Philippines, South East Asia, and Japan since 1997.
Technical challenges
A few of the respondents have also experienced integration challenges, such as delays in cash in (34%) or cash out (15%), as well as security concerns like spam at 31%, unauthorized transactions at 13%, and loss/theft of money at 16%.
However, the institute saw that all survey respondents have expressed their intention to continue using e-wallets in the next six months.
The value of e-wallet transactions, however, remains low with usual exchanges averaging between PHP 1,000 to PHP 5,000 according to the survey results. This may be due to the transaction limits imposed by e-wallet operators or other preferences for platform by users for large-value transactions. Simultaneously, as transactions and consequently, the value of money stored in e-wallet are small, the financial impact of issues encountered may be immaterial. Further survey and analysis are needed to validate this hypothesis.
Sending money is the primary reason for the extensive use of e-wallets in the country. The report found that 87% of the respondents use it to send money while 83% use them for online payments.
While security-related concerns rank at the bottom of issues encountered, it remains the key concern for the few respondents who spent less time using e-wallet in the last six months (43% of the 4% of respondents mentioned security issues as concern for the decline in the frequency of use of e-wallet).
A significant 57% of respondents expressed dissatisfaction with the level of government support. In the report, 71% highlighted the challenge of filing complaints against e-wallet operators, while 75% faced issues related to fraudulent activities.
Also, 67% in both segments noted the government’s lack of sophisticated tools to trace online criminals and cyber attackers. About 60% of both groups emphasized the absence of penalties for e-wallet operators involved in financial losses and fraudulent activities.