Blog and Updates

Online Payments and Financial Inclusion Programs for the Philippines’ Unbanked

Learn how Bangko Sentral ng Pilipinas’ online payments initiatives are helping small businesses and the unbanked in the Philippines.

By: Tania M. Voss

Digital Transformation

Discover Global Network

Online Payments

Adapted from the original article ‘Cashless Payments: Redefining Global Economic Opportunity & Promoting Sustainable Development Goals’ by Discover® Global Network.


The Philippines is ready for the next phase of online payments adoption, according to the Bangko Sentral ng Pilipinas (BSP).

More than 72% of the Filipino population are aged 40 years old and below, belonging to a broader class of digital native population. This tech-savvy demographic allows the BSP to further advance its digital finance initiatives.

Since its inception as the National Retail Payment System (NRPS) Framework in 2015, strategic programs have been launched to increase the number of digital transactions in the Philippines.

These efforts include the widespread adoption of QR Ph codes, Bills Pay Ph, and eGov Pay. Electronic fund transfer services in the form of InstaPay and PesoNET have also been established across major financial channels.

Through these initiatives, digital retail payments saw a 42.1 percent share out of all transactions in the Philippines in 2022. It is a significant increase from a recorded 30.3 percent in 2021, and 20.1 percent in 2020.

Coupled with external factors such as the aftermath of the pandemic, the rise of online shopping, and the fast-growing number of financial technology products, the Philippines is now ready for more online payments initiatives towards a more “cash-lite” future.

Undoubtedly, BSP’s digital financial inclusion efforts are only going to get more comprehensive moving forward.

Here are five BSP digitization programs that are gaining more traction this 2024.


1. Connect more Filipinos into the formal economy, especially low-income groups

The Philippines has always been a cash-based economy. As of 2019, only 29 percent of Filipino adults have a bank account. While it has more than doubled in a span of two years to 60 percent in 2021, there are still 40 percent of Filipino adults not linked to a bank account and, in extension, the formal economy.

With the rise of convenient and accessible digital payment technologies, more Filipinos, especially those from low-income groups, can now participate in the formal economy. More Filipino adults participating in the formal economy allows more money to circulate, and helps small businesses grow exponentially.

Moreover, digital payment programs prevent Filipinos in low-income groups from being susceptible to salary scams and predatory lending. As each transaction is recorded digitally, they have evidence to dispute insufficient payments and other fraudulent practices.


2. Better digital payment options for small businesses

Large enterprises are one of the biggest drivers of increasing digital payment transactions. They have the capacity to utilize modern financial technology (fintech) tools that are up to the latest cybersecurity standards.

However, that is about to change in the next few years, as more micro-, small-, and medium-enterprises (MSMEs) are adapting to the BSP’s payments digitization efforts.

For instance, nearly all merchants at Carmona Public Market in Cavite are now using a digital platform under Paleng-QR Ph Plus. This standardized QR technology has enabled small businesses to accept digital payments, and easily track their sales directly from their e-wallets or bank accounts.

This example at Carmona Public Market is simply one of the many hubs that are effectively using the centralized QR code for payments. 

Paleng-QR Ph Plus is just one of the many digital payment technologies in the BSP’s pipeline for MSMEs nationwide. 


3. Help MSMEs gain access to more financial services for growth and economic resiliency

In line with helping MSMEs manage their sales and transactions, digital payment technologies can also give them a foothold for growth and economic resiliency. Fintech services allow MSMEs to gain access to more financial services that can foster exponential growth and build better economic resiliency against downturns like the pandemic.

Digital finance systems offer more than simply enabling cashless transactions; they are also tools for micro financing and lending. These financial functions can be difficult to access for small businesses as traditional lenders may only give them limited credit limits or small loan amounts due to their financial standing.

Taking advantage of these systems can help MSMEs propel their growth, which, in the long run, can help them build their credit score. A stronger credit score strengthens the business’ standing in financial institutions, giving them the trust and confidence to offer higher credit limits and bigger loan amounts.


4. Better contactless payment experiences to get more Filipinos to go cashless

Along with the increasing number of digital payment options is the rise of better contactless payment options. This pattern has been observed globally as almost 62 percent of consumers are likely to go cashless based on the convenience of contactless payment services, according to the 2022 Global Consumer Fintech Survey.

Fortunately, many fintech companies are quite competitive in providing better contactless payments. It is backed by the numbers of Discover® Global Network, which saw an over 109 percent YOY increase in its global contactless sales volume from 2021 to 2022.

In the Philippine setting, many digital banks offer higher interest rates compared to traditional banks. It incentivizes more Filipinos to go cashless by providing better contactless payment experiences, not only as a payment alternative but also to build a better credit score.


5. Stronger cybersecurity measures to protect consumer data and hard-earned money

Amid the increasing number of digital payment channels are the increasing number of cyber threats that put consumer data and their hard-earned money at risk. For this reason, the backbone of all digital finance inclusion efforts by the BSP is cybersecurity. 

To reinforce the cybersecurity of the digital financial sector, the BSP focuses on cyber resilience, cybersecurity hygiene practices, and cybersecurity risk management. In 2024, the total loan books for digital banks are expected to increase with the development of new programs for consumers and MSMEs.

At the same time, the BSP continuously reminds consumers to take charge of the security of their data. Some of the recommended measures include enabling one-time passwords on online transactions and being wary of text scams, especially those containing click-bait links.


The Philippine digital payments revolution

By the end of 2023, BSP Deputy Governor Mamerto Tangonan believes that the share of online payments in total retail revenue would account for 50 percent. It’s not a far-off estimate, as 1 in 3 Filipinos share the same sentiments.

According to the Visa Consumer Payment Attitudes Study 2024, 43% of Filipinos now have less cash in their wallet compared to only a year ago. In fact, the first quarter of 2024 recorded that Filipinos relied less on cash as a payment method, dropping from 96 percent in 2023 to 87 percent in 2024.

Given these estimates, it is possible that the Philippines will be a cashless society by 2030. Intensified by the digital finance inclusion efforts of the BSP, advancing a fully cashless society in the Philippines will become a reality even before the turn of the new decade.


Main Source:

451 Research, part of S&P Global Market Intelligence. 2022 Global Consumer Fintech Survey: Key Findings. Custom survey commissioned by Discover, July 2022