Alternative payments disrupt Philippines’ e-commerce payment market
GCash is king in the country.
Alternative payments are increasingly becoming mainstream in the Philippines, and this could be seen in no better industry than the e-commerce market. Over 30.7% of all e-commerce value in 2021 was via mobile and digital wallets, according to a study by GlobalData.
The data analytics firm noted that although “cash on delivery” remains one of the most preferred payment methods by Filipinos, alternative payment solutions are displacing this.
“Alternative payment solutions have surpassed cash to become the most preferred payment tools for e-commerce purchases over the last few years. This is supported by the rising internet and smartphone penetration, growing consumer preference and rising merchant acceptance,” said Nikhil Reddy, payments senior analyst at GlobalData.
The country's e-commerce payment market is crowded with several domestic and international players such as GCash, Maya (formerly PayMaya), PayPal, and GrabPay leading the space.
GCash alone accounted for 18.2% share of the total e-commerce payment value in 2021, according to GlobalData’s 2021 financial services consumer survey.
Online shopping platforms such as Shopee and Lazada also offer their own digital payment solutions ShopeePay and Lazada Wallet.
Buy now pay later solutions have also become a key focus area of digital wallets. GCash, for example, recently launched its own BNPL solution GGives in March 2022, allowing repayments of up to 24 installments.
COVID-19 is also another factor that pushed the adoption of e-commerce payments.
“Whilst alternative payment tools lead the Philippines e-commerce payment space, they are also now increasingly being used for in-store payments,” Reddy said. “With the growing adoption of QR code-based solutions among merchants and government initiatives to push electronic payments, alternative payments are poised to disrupt the country’s overall consumer payments space.”