CASH IN A FLASH - The Philippines

Growing appeal of phone apps

A user shows his PayMaya-issued card. PayMaya offers a smartphone app that allows users to create a "virtual" credit card without needing a bank account.
A user shows his PayMaya-issued card. PayMaya offers a smartphone app that allows users to create a "virtual" credit card without needing a bank account. PHOTO: PAYMAYA

Cashless payments are growing in Asia with consumers lured by an increasing array of services, from smartphone payment apps such as e-wallets to stored value cards and cheap online interbank transfers.Many like the convenience and safety of not having to carry cash. But the growth is not universal, and, in some countries, cash remains king because of fears of identity theft as well as the lack of infrastructure and lack of knowledge of the digital world.

In the Philippines, cash is still king.

Just one in 10 Filipinos transacts online via bank accounts, although half the nation's population of 102 million are already using the Internet. Out of 2.5 billion bank payments worth US$74 billion (S$104 billion) each month, only 1 per cent, or about US$740 million, are electronic and most payments involve small amounts.

A boom in mobile phone use, though, could soon change things.

The Philippines is the fastest- growing smartphone market in South-east Asia. There are currently 40 million Filipinos with smartphones and that number is forecast to hit 90 million by 2021.

Using Apple, Android and Facebook apps, and "digital wallets", mobile phone users can open credit and debit accounts that they can use to transact online, without needing a bank account or even an Internet access; just the SIM card is needed.

Voyager Innovations, a unit of telco Smart Communications, currently has over 11 million customers using its smartphone apps to pay for Internet and in-store purchases, transfer money and even secure loans. It declined to give exact growth figures, saying only that they were in the "triple digits".

Smartphone apps have proved appealing because they free up people from having to use bank accounts to make payments or indeed even having a bank account.

Raul Dancel

A version of this article appeared in the print edition of The Sunday Times on March 19, 2017, with the headline 'Growing appeal of phone apps'. Print Edition | Subscribe