The latest Visa Consumer Payment Attitudes study reveals that the lockdowns and mobility restrictions prompted Filipinos to adopt online shopping, which also resulted in the surge to e-commerce, with 52% of respondents shopped via websites and apps and 43% bought something through social media channels.
With the surge in online shopping, cashless became the preferred payment method over paying with cash. This was due to fear of contracting the virus from bills as well as the convenience digital payments bring.
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Before the imposition of lockdowns that prevented people from going out, more than 7 out of 10 payments were made using cash. Fast forward to months after the World Health Organization’s announcement of COVID-19 classifying as a pandemic, only 5 out 10 still use cash. And this is not limited to the Philippines because the Visa study found the same trend or pattern in the Southeast Asian region.
Filipinos cited using more contactless payments (73%), for fear of contracting the virus from bills (54%). More people have adopted digital payments (50%), which then led to fewer people carrying cash. In addition, Filipinos see bill payments (81%), grocery shopping (71%), and overseas travel (68%) as the top categories where they would likely go completely cashless in the future.
“Based on Visa’s data, contactless transactions have been increasing steadily month-on-month in the Philippines since August last year,” said Dan Wolbert, country manager for the Philippines and Guam, Visa. “We believe that contactless payments will continue to grow as Filipinos appreciate the benefits of contactless payments, including perceiving this payment method to be more hygienic due to the absence of physical interaction at point-of-sale.”
Contactless payments saw a 66% increase in usage among current users also citing the pandemic as a primary reason for the new or enhanced behavior. In addition, 88% of Filipinos who had not used contactless payments stated interest in using this payment method in the future. Top benefits perceived by Filipinos for the usage of contactless cards include not having to carry cash with them (88%), feeling safe from infection (75%), and being an innovative payment method (68%).
The study, conducted in August and September 2020, saw almost 9 in 10 Filipinos have increased their online shopping activities on websites or apps, while 7 in 10 are shopping more on social media channels. Large online marketplaces have become the go-to place for online shopping for most of the shoppers (53%). Home-based businesses also experienced brisk sales with 61% of respondents preferring to support these micro-entrepreneurs.
“Based on Visa’s data, we see double-digit growth for eCommerce transactions for purchases on marketplaces and digital goods. In addition, one in four active Visa cardholders made their first eCommerce purchase during the first half of last year. Categories that they made their initial purchases include food & groceries, bill payments, and pharmaceutical products,” Wolbert said.
Wolbert noted that the new shopping preferences might turn into post-pandemic habits.
The study also showed a large user base who started ordering home delivery, likely due to lockdowns or movement restriction orders in the country during the pandemic. More than 9 in 10 Filipinos used home delivery in the Philippines and 67% of them increased their use of home delivery services during the pandemic.
“Even though we’ve made progress in digital payments adoption, there remain huge opportunities for us to encourage more Filipinos to embrace digital payments as we look to expand digital payments acceptance across the country,” Wolbert said.