The Emergence of Cashless Societies: An Overview of Payment Digitalization in the Philippines

Abstract

This paper takes an overview of the current digital payment conditions across various nations with an emphasis on the Philippines. In addition, this study also analyzes the advantages and disadvantages of a cashless society and identifies opportunities from the existing technology without jeopardizing data privacy and internet security. The emergence of cashless societies already started before the COVID-19 Pandemic, but the trajectory of digital payment volume shifted upward due to the limitations and threats brought about by the COVID-19 situation. Cash and coins have been in circulation for centuries and date back when the first trading commenced. Money is considered the most acceptable and reliable medium of exchange in business transactions because of the efficiency of transfer of value and stakeholders’ security. The rise of modern technology and innovation brought forward new digital products such as mobile devices, smartphones, and other accessories. The latest development in the digitalization space revolutionized many aspects of our day-to-day activities. Notably, it paved the way for Financial Technology (FinTech) to compete with conventional payment and financial service methodologies. The researcher used a qualitative method as a study methodology using secondary data from research and publications to evaluate the varying status of cashless transformation worldwide. Many countries are now moving towards being cashless societies like Sweden, India, and China. In the ASEAN region, the Philippines is also promoting the use of digital payment systems and is expecting to achieve the same goal by the year 2025. Bangko Sentral ng Pilipinas (BSP) fully supports the objective of transforming the country as a Cashless Society and published a roadmap on Digital Payments Transformation from 2020 to 2023. Because of the COVID-19 Pandemic and the threat of money being a conduit of infection, many Countries are now favoring a cashless society such as India, Malaysia, United Arab Emirates, Indonesia, Vietnam, Singapore, Italy, and the Philippines, according to the study conducted by an international money transfer firm MoneyTransfers.Com.