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The Philippines payments guide

A guide to payments in The Philippines.

Welcome to The Philippines

The Philippines is one of the most mobile — and arguably most under-estimated — ecommerce markets in Southeast Asia.

As the second most populous country after Indonesia in the Southeast Asia region, the Philippines’ ecommerce market can expect an annual growth rate of 101.4% from 2013 until 2018, driven mainly by heavy internet usage and high mobile penetration.

The internet penetration is under 50%, and the majority of the population is still under-banked, or even unbanked.

Conversely, Filipinos have long been among the most prolific mobile users in the world.

These market and demographic factors have a number of implications for how Filipinos prefer to pay online.

The majority of ecommerce transactions are made with cash-on-delivery and bank transfers (estimated at 30-70% depending on business and vertical) and the market is also notable for its low level of credit card use and rapid growth in mobile as a payments channel.

Both the current size and growth potential of the ecommerce market are impressive. Because cash transactions cannot be easily tracked, analysts often under-estimate the size of the current opportunity.

Looking to the future, internet use is growing at some of the fastest rates in the world and 70% of Filipino internet users are 15-34 years old.

Key payment methods in The Philippines

The Philippines has one of the region’s lowest card penetration rates. Consumers typically make their purchases online through alternative online payment methods.

Digital wallets

GCash and SmartMoney are two popular digital wallet services that are used by shoppers for online purchases. GCash is a reloadable prepaid card co-branded with Mastercard that enables shoppers to pay by text message, or on their mobile or desktop, much in the same way they would with a credit card.

Online bank transfers

This is a popular payment option in the Philippines, with some of the banks being Banco De Oro (BDO), Metrobank, and Bank of Philippine Islands (BPI), Rizal Commercial Banking Corp (RCBC), Chinabank, EastWest Bank (EWB), Landbank, Maybank, Philippine National Bank (PNB), RobinsonsBank, Security Bank, Sterling Bank of Asia, United Coconut Planters Bank (UCPB) and Unionbank. The shopper can make payment through their own online banking website.

Over-the-counter (OTC) transfers

This is a cash transfer where the shopper makes an “over the counter” bank transfer, by depositing the money in person at their chosen bank branch or through ATM transfers with banks like Metrobank, UnionBank and BDO.

Convenience stores

Consumers can make over-the-counter payments for online purchases at designated outlets. Some outlets include convenience stores like: Ever Superstores, Gaisano, NCCC, Via Express, ExpressPay, Tambunting and Cignal.

Inside tips

Authorization rates tend to be lower in the Philippines than other markets, mainly due to the young generation being less willing to pay for content. We see lower conversion rates especially for digital content like games and music downloads.

What Adyen offers

For digital wallets, Adyen offers payment pre-selection for GCash, which the shopper can select to make payment on the GCash merchant page without an intermediary page.

For online bank transfers, Adyen supports a total of 11 local online banking services and 16 banks for over the counter and ATM payments.

Adyen works with five international over-the-counter providers, namely CashU, I-remit, Cash Pinas, PNB rapid remit and Ventaja-payremit.

Through a single integration, Adyen enables merchants to offer all of these payment methods, while providing consolidated reporting, transaction level reconciliation as well as the ability to settle funds outside of the Philippines.

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