More millennials are shopping online and availing of cashless payment methods
The last two months of last year (2017) showed that mobile-savvy millennials shopped online and availed of cashless payment options to get their holiday shopping done. This behavior, spurred by sales and promos from digital companies, was gleaned from data generated by various platforms of Voyager Innovations, digital innovations arm of PLDT and Smart Communications.
Online Shopping on the Rise
This aligns with Voyager’s goal to provide financial and digital inclusion to more Filipinos. Part of that goal is PayMaya, the first prepaid online payment app (a mobile wallet) that allows anyone without a credit card to make online transactions.
The number of unique PayMaya users who transacted online from November to December 2017 jumped three-fold compared to same period last year. Meanwhile, PayMaya’s Single’s Day event in November 2017 resulted in record-high transaction volumes for Takatack, Voyager’s eCommerce platform. Both trends suggest that more Filipinos are getting comfortable in online and mobile app-enabled avenues as a way to do their shopping.
“While mall shopping is still the norm for most Filipinos, we saw a marked increase in online shopping among our mostly millennial user base during the 2017 holiday season,” said Paolo Azzola, Chief Operating Officer and Managing Director at PayMaya Philippines. PayMaya is the digital financial services arm of Voyager.
He added that online transactions recorded by PayMaya account holders further increased when different online marketplaces (such as Lazada, Zalora and Takatack) launched their big online sales in November and December. In these sales, PayMaya also gave its account holders an added exclusive 20% discount.
Cashless transactions, the viable alternative
PayMaya data also showed that from November to December 2017, online transactions via retail merchants such as Lazada topped the list for PayMaya account holders. According to Azzola, the steadily growing use of cashless payments methods in online retail sites suggests a shift of the behavior of consumers, who use alternatives such as PayMaya for their purchases, despite the availability of cash-on-delivery.
“On top of the online promo offerings, convenience and the worsening traffic in major cities are probably compelling more individuals to do their shopping online,” Azzola said. “Consumers are also given flexibility by online merchants in terms of payment options, making online shopping a more attractive option.”
Gadgets top the to-shop-for list
Eight of the top ten products ordered through Takatack, Voyager’s online shopping marketplace, belonged to the electronic product category. Power banks, external hard drives, Bluetooth speakers, and smart watches topped the shopping list of consumers. “We are seeing encouraging results as more Filipinos go online to shop, especially during special seasons. This trend has translated to record-high transaction volumes at Takatack particularly during the Singles’ Day event in November, and we expect it to continue as we move on to 2018,” explained Marc Concio, Head for Digital Commerce at Voyager Innovations.
Digital payment adoption increasing
Filipinos’ adoption of digital payments and commerce has increased in the last two years, since the introduction (and regulation by the Banko Sentral ng Pilipinas) of prepaid e-wallets (digital wallets) such as PayMaya, the first prepaid online payment app (it’s free) that allows anyone without a credit card to make online transactions.
Digital wallets encourage financial inclusion since anyone with a mobile phone in the Philippines can create an account and use it for pay for online purchases up to a certain amount limit. Prior to digital wallets, the options for online transactions were credit cards (whose application process may be tedious), debit cards (which required opening a bank account), or cash on delivery (which now competes with the convenience of cashless payment options).
99% of all payment transactions in the Philippines are still done via cash, while electronic payments by businesses and individuals account for 1% and 0.3%, respectively. These are the latest available data from Better than Cash Alliance as of 2013. Whilee these figures most likely have grown over the past year, stepping up digital payments adoption in the Philippines is the goal of Voyager Innovation. The National Retail Payment System initiative led by the BSP, and supported by banks and e-money issuers like PayMaya, aims to increase cashless transactions to 20% of the total volume of payment transactions by 2020.