Digital payments: The bedrock for a fast-paced digital economy
With a click, consumers have access to an endless selection of items. From fashion-forward clothes to trending skincare essentials to the latest gadgets and to a wide array of services, people can easily make purchases with the convenience of their mobile devices.
As the world embraces this change, consumer behavior has shifted to expect digital-first solutions in everyday experiences. With this accessibility, consumers now expect the same access and usability from their financial institutions.
The times are moving faster along with the economy, and it is up to commerce to keep up through digital transformation. Connected devices, according to advisory firm Gartner, will reach 20 billion devices, and in the Philippines, smartphone penetration is only expected to go higher as mobile devices become more affordable.
However, despite the global trend now being more evident, the Philippines has a huge leap to make to see its digital economy flourishing.
The work needed to realize this vision is massive, based on data from the Bangko Sentral ng Pilipinas (BSP): 99-percent of transactions are still cash-based, seven out of 10 Filipino households are without bank accounts, and credit card penetration is still at a measly one percent.
Mobile wallets will play a key role in building the digital economy, as they will serve as the bedrock for majority of the transactions — whether physical or mobile. Hence, building a reliable digital wallet is imperative to serve this very purpose, especially since the broader economy is expected to grow faster.
GCash, operated by Globe Fintech Innovations Inc. (Mynt), has built a mobile-first, telco-agnostic digital wallet to give Filipinos a chance to participate in the digital economy.
With its multiple features, users can top up their prepaid balance, pay utilities, book movie tickets, send money, as well as conduct cashless transactions.
“Our vision is to create a digitally driven platform that keeps up with the times, promotes convenience and provides a connected experience for users,” GCash’s Chief Commercial Officer for Payments JM Aujero said. “We aim to share it with everyone because with digital payments, everyone in a fast-paced economy benefits and thrives.”
Seamless payment experience
Besides personal features that warrant convenience, everyone in a fast-paced economy benefits from digital payments. Primarily, mobile wallets allow buyers to purchase by paying directly from their mobile wallets either through debit or credit.
With globalization on the rise, digital payments also open the doors for more foreign transactions as foreign users no longer have to worry about purchasing directly or about payment compatibility when buying an item or availing a service.
GCash is a front-runner in this game, as it partnered with Ant Financial of China to allow Alipay users to use their mobile wallets to pay for goods and services through GCash’s innovative QR payments solution.
Digital payments are here to improve the ease of conducting transactions by removing the hassle of cash handling and promoting seamless payments. Besides this, mobile wallets act as gateways to technological advancement in the world economical field.
Users can also build a solid transaction history that can improve their credit access. It also lowers the cost of providing financial services to the underprivileged while increasing the security and convenience of utilizing savings, payments and insurance products.
As of writing, more than 1.7 billion people in the world are still unable to participate in the formal financial system. In the Philippines, 77 percent of Filipinos remain unbanked.
Bridging the gap
Digital payments bridge this gap by warranting access to financial payment services to every citizen with the ability to conduct card and digital transactions by simply having a smartphone and a SIM card.
“Our vision is to help shape a country where each citizen is financially included, has his or her own peace of mind and has nothing to look forward to in the future but financial security,” Aujero said.
Financial inclusion has been acknowledged as essential in reducing poverty and achieving inclusive economic growth. According to the World Bank, greater access to financial services for both individuals and firms helps cut down income inequality and accelerates economic growth.
Meanwhile, merchants who have adopted digital payments into their systems can collect their payments remotely, with no need for employees to handle cash, thereby increasing productivity and promoting efficiency — both critical in producing quality output in a short span of time.
This also cuts down the risks and costs of handling cash at an individual level.
With digital payments at hand, governments, organizations, and companies can decrease overall costs in their endeavors by eliminating wasted time and resources stemming from creating and receiving ineffective cash payments.
Governments can also reduce tax avoidance as well as the impact of counterfeit money. Digital payment also increases accountability and tracking, thanks to their digital footprint. Making transaction records easy to trace reduces corruption and theft, which affects every citizen in the country.
The central bank fully supports the promotion of digital payments, aiming to transform 20 percent of the total cash transactions to non-cash by 2020. GCash is at the forefront of this initiative, leading the industry with 20 million users that use the app for a variety of services.
“At GCash, we strive to look at the bigger picture and paint it. Our economy is rapidly changing, and it’s high time no one gets left behind,” Aujero said.
