PHL digital payment landscape now maturing

THE PHILIPPINES’ digital payment landscape is likely to develop further this year as more Filipinos prefer to go cashless, with interoperability expected to be a priority as consumers want frictionless transactions.

Digital payments now have a bigger role in everyday commerce in the country and has now become a necessity for both consumers and merchants from just being a nice-to-have, according to Fiuu, a payments service provider operating in Southeast Asia, including the Philippines.

This shift was partly driven by the Bangko Sentral ng Pilipinas’ (BSP) push to digitalize retail transactions to improve financial inclusion and the development of the country’s real-time payments infrastructure, which has led to the growth of cashless and contactless transactions.

“The digital payment landscape is moving into a more mature phase as we enter 2026, shaped as much by infrastructure and regulation as by consumer behavior,” Fiuu Chief Executive Officer Eng Sheng Guan said.

“Our focus at Fiuu in the Philippines is on supporting merchants as expectations rise, daily digital payment usage accelerates, and the ecosystem continues to mature.”

Consumers in the Philippines now expect convenience, value, and security as standard when making online payments, the company said.

“Retailers are using payments as strategic tools for growth, engagement, and risk management. Banks and wallets are differentiating themselves through interoperability, compliance capabilities, and trust,” it added.

“Infrastructure, regulation, and consumer behavior are increasingly aligned, setting clearer parameters for success. In this environment, market leadership will be defined not by rapid adoption alone, but by the ability to deliver consistent, interoperable, and secure payment experiences at scale.”

Interoperability has become more important as consumers want to be able to pay with any card or wallet without friction, it said.

“The arrival of Apple Pay and Google Pay significantly raises consumer expectations around universal acceptance, while 24/7 payment rails remove timing and availability as limiting factors… As a result, fragmented ecosystems, limited wallet acceptance, or system downtime increasingly result in abandoned transactions rather than workarounds.”

Retailers are beginning to adopt multi-wallet checkout systems to cater to their customers’ needs to maximize their sales, it said.

“Interoperability in 2026 is not about innovation. It is about meeting minimum commercial expectations in an increasingly competitive retail environment where consumers expect to tap and pay instantly, regardless of channel or purchase size,” Mr. Eng said.

More consumers in the country are also shifting towards contactless and card-based payments, even for small-value transactions like transport and dining, which were previously done with cash, which shows that they are becoming more comfortable with going cash-lite and cashless as a default, Fiuu said.

Meanwhile, flexible payment options like embedded credit and buy now, pay later are also growing, supported by better regulatory controls and identity verification.

“Consumers remain open to embedded credit when it is seamless, transparent, and secure. Trust is increasingly the deciding factor, rather than access alone. Importantly, the growing familiarity with using cards for everyday spending is also normalizing short-term credit as a routine payment behavior, not just financing tools for large purchases,” Fiuu said.

“For retailers, embedded finance offers clear upside, including higher basket sizes and improved conversion rates. However, partnerships are becoming more selective. Merchants are prioritizing providers that can balance speed with compliance, ensuring growth does not introduce regulatory or reputational risk.”

Mr. Eng said platforms that ensure strong customer protection, transparency, long-term trust, compliance, and governance will drive the expansion of embedded finance in the Philippines.

The share of online payments in monthly retail transactions stood at 57.4% in terms of volume and 59% in value terms in 2024, BSP data showed. These are up from 52.8% and 55.3%, respectively, in 2023.

The central bank wants digital payments to make up 60%-70% of the total volume of retail payments by 2028 in line with the Philippine Development Plan. — Bettina V. Roc