Digital payments: The modern way to transact

Did you know that digital payment transactions–which are cashless payments for goods and services through online and mobile app-based platforms–have accounted for 50% of all digital retail payment transactions in the Philippines by the end of 2023? So says the Bangko Sentral ng Pilipinas (BSP) in their announcement in February 2024.

You shouldn’t be surprised. In all likelihood, you or someone you know already used a type of cashless digital payment, which includes debit, prepaid, and credit cards, mobile payments, and digital wallets. The ubiquity of affordable smartphones and also the decreasing cost of internet access have enabled more Filipinos to use technology-based services such as digital payments.

These digital payment methods have also spawned new types of services to flourish, like e-commerce websites and ride-sharing services. Below are other benefits when using digital platforms:

• Speed and convenience. Digital payment platforms, such as mobile wallets, online banking, and payment apps allow you to transact quickly and efficiently. Transactions happen in real time or with a minimal waiting time. You don’t need to visit a branch or a store to do transactions.
  
• Accessibility and availability. Digital payment options are available 24 hours, 7 days a week. You can make payments anytime and anywhere, if you have an internet connection.
  
• Seamless integration. Digital payments work on various devices and platforms, making it easy for you to link bank accounts, credit cards, or other payment methods.
• Security and fraud protection. Digital payment methods come with security measures, such as encryption and multi-factor authentication to protect your personal and financial information from scammers and hackers.

Of course, there are a few drawbacks in digital payments. Below are probably the most obvious:

• Vulnerable to scammers. While it’s true technology plays a role in keeping your transaction secure, technology can only do so much. Users can still be targeted by scammers who can trick you into sending money to them thinking that it is a legitimate transaction. Always be vigilant against fraudsters who want to take the money in your digital wallet, debit card, or even steal your credit card information.
  
• Would not work properly in service downtime. It is most likely that you have experienced going to an automated teller machine (ATM) card to withdraw cash but the machine itself would not work, so you’re left with nothing. Digital payment services also have similar problems. There will be moments when a digital payment platform experiences a planned or unplanned downtime and you are unable to make payments. Also, if an area does not have sufficient internet connection, your preferred mobile payment platform may not connect online so you are unable to pay.

Regardless of the issues, it is already inevitable that digital payment methods will hold a place in the entire financial transaction scheme. You’d be seeing more people using fewer cash as they adapt to the new reality. So be ready to transition to this modern way of financial transaction.