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Payments Landscape in the Philippines: Opportunities and Risks to 2021

Payments Landscape in the Philippines: Opportunities and Risks to 2021


Cash remains the most popular consumer payment instrument in the Philippines, accounting for more than 99% of the country’s total payment transaction volume in 2017. 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 central bank, the share of cash is anticipated to decline gradually over the forecast period.

Debit card penetration in the Philippines is among the lowest of its peers. With the aim of encouraging financial institutions to establish branches in rural areas, the central bank approved a new regulation in April 2015 whereby the processing fees associated with establishing new branches are waived. The central bank has also expanded the scope of activities for micro-banking offices, allowing them to open bank accounts in rural areas. As of September 2016, there were a total of 651 micro-banking offices present in the country.

Remittances form a key part of the Philippine economy, accounting for roughly 10% of the country’s GDP in 2016. Remittances also play an important role in driving growth in the country’s payments market. Following increasing migration, banks are offering bank accounts and debit cards that allow migrants to transfer money to beneficiaries in the Philippines. For instance, in November 2016 BPI partnered with Australian banking group Westpac to allow Filipinos working in Australia to send money to their friends and families back home.

Though small in size, the credit card market registered robust review-period growth, which can be attributed to the steady rise in the middle-class and young working populations. Also driving credit card transactions are monthly instalment facilities and pricing benefits such as annual fee waivers, reward programs, and cashback. Furthermore, the government has introduced regulatory measures to strengthen and stabilize the credit card market. The implementation of the Philippine Credit Card Industry Regulation Law in 2016 is one such measure.

The report Payments Landscape in the Philippines: Opportunities and Risks to 2021, provide top-level market analysis, information and insights into the Philippines cards and payments industry, including -

  • Current and forecast values for each market in the Philippines cards and payments industry, including debit, credit, and charge cards.
  • Detailed insights into payment instruments including cheques, cash, and payment cards. It also, includes an overview of the country's key alternative payment instruments.
  • E-commerce market analysis and payment methods.
  • Analysis of various market drivers and regulations governing the Philippines cards and payments industry.
  • Detailed analysis of strategies adopted by banks and other institutions to market debit, credit, and charge cards.
Companies mentioned in this report: Land Bank of the Philippines, Banco de Oro, BPI, Metrobank, Rizal Commercial Banking Corporation, Citibank, EastWest Bank, BancNet, Megalink, Visa, Mastercard, JCB, and American Express

  • To transform the country’s payment system and increase the acceptance of electronic payments, the Bangko Sentral ng Pilipinas (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 National Retail Payment System (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 2017, a total of 33 BSP-supervised financial institutions and other non-bank electronic money issuers had integrated with PESONet. Furthermore, BSP is working on the implementation of 24/7 low-value electronic fund transfer system InstaPay, which is due to launch in 2018.
  • To boost the credit card market, in August 2016 the Philippine Credit Card Industry Regulation Law was introduced granting BSP with powers to supervise all credit card issuers and acquirers operating in the country. Violation of any rules or regulations by credit card companies will result in a penalty. BSP mandates all credit card issuers to perform customer identification and due diligence procedure s before issuing credit cards, and forbids card issuers from adopting any unfair and abusive practices when collecting credit card debt.
  • In order to align with international payment card standards, in November 2014 BSP made it mandatory for banks to shift from the traditional magnetic stripe to more secure EMV chip cards by January 2017. Following this announcement, BancNet signed an agreement with Visa in February 2015 to accelerate the migration to EMV chip cards for all domestic transactions. In addition to cards, the migration process ensures that ATMs and POS terminals are compliant with EMV standards. To help banks migrate to EMV card portfolios, BSP has extended the deadline from January 1, 2017 to June 30, 2018, after which all non-compliant banks will face penalties.
Reasons to buy
  • Make strategic business decisions, using top-level historic and forecast market data, related to the Philippines cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in the Philippines cards and payments industry.
  • Assess the competitive dynamics in the Philippines cards and payments industry.
  • Gain insights into marketing strategies used for various card types in the Philippines.
  • Gain insights into key regulations governing the Philippines cards and payments industry.

Executive Summary
Executive Summary
Card-based Payments
E-commerce Payments
Alternative Payments
Payments Infrastructure & Regulation

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