Card Payments to grow this year; more opportunities in 2024, Global Data says

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Card Payments in the Philippines is growing this year and is expected to meet new opportunities according to GlobalData's Philippines Cards and Payments - Opportunities and Risks to 2024' report, June 2021. 

The 2020 GlobalData has said that after the card payments dropped to -7.4% due to the COVID-19 pandemic, it is expected to set to bounce back to 15.4% this year, and will have more opportunities in 2024, as reported by Global Data. 

GlobalData is a provider of detailed analysis of market trends in the Filipino cards and payments industry. It provides values and volumes for some key performance indicators in the industry, including cash, mobile wallets, cards, and cheques during the review-period.

The value of card payments in the country is forecasted to account for a compound annual growth rate (CAGR) of 12.3% from 2020 to 2024, stated in the  GlobalData‟s Payment Cards Analytics‟ Press Release. 

Meanwhile, the Philippines Cards and Payments - Opportunities and Risks to 2024 includes current and forecast values for each market in the Filipino cards and payments industry, including debit, credit, and charge cards. 

As well as detailed insights into payment instruments including cash, cards, mobile wallets, and cheques. It also includes an overview of the country's key alternative payment instruments. 

Also, E-commerce market analysis, analysis of various market drivers and regulations governing the Filipino cards and payments industry, and of strategies adopted by banks and other institutions to market debit, credit, and charge cards. 

The report stated that the government passed a new law on credit card interest rates in September 2020 whereas it rounded off the interest rate on credit cards at 2% per month (or 24% annually), effective from November 3, 2020.

It also capped the interest rate on credit card installment plans at 1% per month. 

Moreover, to grow electronic payments, an instant payment service was launched by the central bank, which is InstaPay, under the National Retail Payment System (NRPS) framework in April 2018. 

InstaPay is an electronic fund transfer (EFT) service that allows customers to transfer PHP funds almost instantly between accounts of participating BSP-supervised banks and non-bank e-money issuers in the Philippines. The service is available 24/7, all year round. 

Instapay is for customers of participating institutions with savings, current, or e money accounts (with or without ATM/debit cards) who can use InstaPay for sending and/or receiving fund transfers. 

On one hand, the entry of digital-only banks has become a new trend in the Philippines and one of them is a neobank that launched its services in March 2021 named Tonik. 

Also, a Singapore-based financial services company, DigiBankASIA, is running a pilot to launch its digital-only bank UNObank in the Philippines. 

It is said that in a country with an over 60% unbanked population, the entry of digital-only banks will complement traditional banks in pushing card adoption and usage.  

Furthermore, banks and payment companies are pressured to play a vital role in promoting card usage and drive consumption during the pandemic.