MANILA – Overseas Filipinos are starting to see the value of digital methods of remitting money, PayPal said Tuesday.
While banks and traditional remittance services like MoneyGram and Western Union remain the preferred channels of overseas Filipinos for sending money to the Philippines, PayPal said its Xoom service is catching up.
According to the PayPal survey, 28 percent of respondents are now familiar with Xoom largely due to its geographic reach, convenience and lower transaction fees.
PayPal said it surveyed seven countries in Asia in March to April last year and found that 31 percent of the Philippine population receive remittances from overseas, the highest rate in all the surveyed markets.
"This high figure presents an opportunity for payment providers and financial institutions to digitize cross border remittance services as a means to reduce costs and increase convenience for customers," PayPal said.
Abhinav Kumar, PayPal’s head of Strategic Partnerships in Southeast Asia said there is also a lot of room to grow for digital payments services in the Philippines based on PayPal's study.
“The bigger opportunity that we have is digitization of cash to remove the friction of moving money," Kumar said during the launch of another PayPal study Global Freelancer Insights Reports – Philippines in Manila on March 27.
Most Filipinos still preferred to pay in cash or traditional payment methods like credit and debit cards, based on the PayPal survey.
Only 33 percent of respondents were aware of or had used digital payments services like e-wallets, mobile wallets or digital currencies--way below 87 percent in China, 82 percent in Singapore and 58 percent for the rest of Asia.
PayPal also noted that while 47 percent of the Philippine population was classified as "unbanked," this was not a hindrance to the adoption of digital payments because 87 percent of the population own smartphones, 46 percent have laptops and 41 percent own tablets.
PayPal is currently one of the biggest digital payment platforms providing freelancers and small entrepreneurs a venue to receive payments from abroad, Kumar said.
“We believe we are extremely relevant in this segment given that our platform transcends boundaries, transcends currencies and offers seamless way to move their money,” Kumar said.