The document provides a technology foresight study on the future of the Philippine payments industry by 2022. It finds that 86% of Filipinos do not have bank accounts, and mobile payments currently make up 41% of the fintech industry. The study uses literature reviews, surveys, and input from experts to develop four scenarios for 2022: 1) financial products shift to serve the unbanked, 2) customers have more choice in an open payments ecosystem, 3) Philippines achieves a cashless society, and 4) customers are the top priority in the industry. Recommendations focus on security, collaboration between traditional and emerging players, and empowering retailers and SMEs to accept digital payments.

1. The Future of Philippine
Payments Industry:
A Technology Foresight
by 2022
Maurice Gonzales
TM 299

2. 86%
2.5
Billion
18%
CAGR
JUNE
2018
Dec 9
2015
41%
86% of Filipinos do not have a
bank account
In 2015, the average number of
payments per month in the country is
2.5 billion
ECommerce in the Philippines have a CAGR
(compounded annual growth rate) of 18% in
the next 5 years
The Bangko Sentral ng Pilipinas (BSP),
together with industry stakeholders, launched
the National Retail Payment System (NRPS)
Framework
Mobile payments, the biggest sector in the
Philippine fintech industry comprised 41% of
the total FinTech Industry.
Bangko Sentral ng Pilipinas (BSP)
mandate to shift debit cards to EMV by
June 2018
Philippine Payment Industry Trends

3. PURPOSE AND
SCOPE OF STUDY

4. 4PURPOSE
Provide an assessment of the current and possible future
scenarios in the Philippine Payment Industry.
Guide them on their decisions
regarding product development,
and go-to-market initiatives.
Banks
Be more competitive in the
local and international
market.
FinTech
Be prepared for the changes in
the Philippine Payment Industry.
Retail Companies
Provide recommendation as the
regulatory and enabling
institution on the support it can
provide.
Government

5. METHODOLOGY

6. 6
METHODOLOGY
1.
Review of
Related
Literature
3.
SWOT
Analysis
2.
Surveys
4.
Delphi
Method
5.
Causal Links
10 Stage Scenario Building
UNIDO Technology Foresight Manual

7. 7
METHODOLOGY
Stage 1 . FOCAL POINT
“Financial cards together with other
emerging digital payment methods will
replace cash as means of payment in
the Philippines in 2022.”
Stage 2 . ENVIRONMENTAL
SCANNING
a. STEEP using Review of
Related Literature
b. SWOT Analysis
c. Survey to Financial Card users

8. 8
METHODOLOGY
Stage 3 . IDENTIFYING KEY PREDICTABLE
VARIABLES
Stage 4 . IDENTIFYING CRITICAL
UNCERTAINTIES
1. Awareness of Financial Products
2. Digital Filipinos
3. mPOS (Mobile Point of Sale)
4. Social Payments
5. Cashless Person-to-Person Payments
6. QR Code Payment
7. Digital microfinancing
8. MSME growth
9. ECommerce shift
10.Digital startup economy
11.EMV on 2018
12.Credit Card Preference
13.Use of Cards in Basic Commodities
14.Use of Cards in ECommerce
15.Convenience and Rewards of Financial
Cards
16.Negative Stereotype on Cards
1. Access to Banks
2. P2P Transmittal
3. Big Data
4. Internet of Things
5. Economic status of Filipinos
6. Contactless Wearables
7. Digital experience in Banks
8. NFC-enabled payment terminals
9. FInancial Security
10.ECommerce growth
11.Millenial's view of financial companies
12.Financial Literacy

9. 9
METHODOLOGY
Stage 5. CLUSTERING OF VARIABLES
Cluster Variable
Awareness & Access of
Consumers
Awareness of Financial Products
Access to Banks
Digital Filipinos
P2P Transmittal
Economic Status of
Filipino Consumers
Economic Status of Filipino
Consumers
Emerging Alternative to
Financial Cards
mPOS (Mobile Point of Sale)
Digital Wallet
Contactless Wearables
Cashless Person-to-Person
Payments
Social Payments
QR Code Payment
Digital microfinancing
Financial Industry Shift Digital experience in Banks
NFC-enabled payment terminals
Industry's Usage of
Critical Technology
Big Data
Internet of Things
Cluster Variable
Philippine Economy MSME growth
ECommerce shift
Digital startup economy
Political and Governing
Laws
EMV on 2018
Preference of Consumers Financial Security
ECommerce growth
Millenial's view of financial
companies
Credit Card Preference
Financial Literacy
Convenience and Rewards of
Financial Cards
Negative Stereotype of Cards
Usage of Consumers Use of Cards in ECommerce
Use of Cards in Basic
Commodities

10. 10
METHODOLOGY
Stage 6 . RANKING OF VARIABLES
14 Panel of Experts were tapped for the ranking of variables through Delphi Method using the online tool:
Delphi Decision Aid.
Expert Segment Group Function
1 Government Technology
Development
Project Management
2 Private Traditional Bank Product Development
3 Private Global Payment
Solution
Product Development
4 Private Traditional Bank Customer Life Cycle
5 Private Emerging
Technology
Product Management
6 Private Emerging
Technology
Marketing and
Business
Development
7 Customer Financial Card
Savvy
Marketing
8 Customer Financial Card
Savvy
Marketing
9 Customer Financial Card
Savvy
Marketing
10 Private Financial
Technology
Product Development
11 Private Financial
Technology
Digital Marketing
12 Private Traditional Bank Trade Marketing
13 Private Financial
Technology
Business Leader
14 Private Traditional Bank ECommerce and
Marketing

11. 11
METHODOLOGY
Stage 6 . RANKING OF VARIABLES
Delphi Method was conducted through an online tool Delphi Decision Aid
Key Drivers Impact
Uncertainty
Mean
Standard
Deviation
Access to Banks and Financial
Institutions
6 4.33 2.54
Customers’ Preference to Formal
institutions
9 1.6 0.92
Customers’ Usage of Financial
Cards
9 2.67 1.49
Customers’ Usage of Digital
Wallet
8 3.67 1.94
Customers’ Usage of Contactless
Wearables
6 3.89 2.28
Customers’ Usage of Social
Payments
6 4.12 0.93
Customers’ Usage of QR Codes 6 3.67 2.16
ECommerce Growth in
Philippines
9 2.5 1.5
Economic stability of Philippines 8 5.37 1.41
Retailers’ use of mPOS 9 2.11 1.59
Retailers’ use of NFC Enabled
Payment
8.5 3.5 1.5
Security in Financial
Transactions
10 2.5 1.5

12. 12
METHODOLOGY
Stage 7. Selection of Scenario Logics

13. SCENARIOS

14. 14SCENARIOS
Financial Product Development Shift to
Underserved Market
Customer is King in the Payments
Industry
An open payment ecosystem in
Southeast Asia
Cashless Philippines in 2022

15. 15SCENARIO 1
• Unbanked Filipinos will be the biggest customer
segment of the financial industry in 2022.
• Through the use of big data and internet of
things, on boarding customers to electronic
financial services will be easier for both financial
companies and customers.
• Newly acquired customers of the payment
industry will be open to other mode of payment
technology.
FINANCIAL PRODUCT DEVELOPMENT
SHIFT TO UNDERSERVED MARKET

16. 16SCENARIO 2
• Merging and collaboration of traditional banks
and fintechs to build a better payment
ecosystem.
• With the interoperability among payment
systems, open banking will accelerate disruption
in the payments industry of the Philippines.
• No dominant player in the payments industry as
customers can freely shift from one financial
company to another
CUSTOMER IS KING IN THE PAYMENTS
INDUSTRY

17. 17SCENARIO 3
• New digital payment network will allow people to
send money instantly through participating
bank’s mobile apps in SEA.
• The ASEAN integration will pave way for
payments and industries to be integrated
between participating countries.
AN OPEN PAYMENT ECOSYSTEM IN
SOUTHEAST ASIA

18. 18SCENARIO 4
• If mandated by government, Philippines can be a
cashless society in 2022.
• A new revolution of financial technology
awareness and usage will be started by the
customers.
• Retailers will move to using point of sale system
through the aid of QR code and paywave
technology.
CASHLESS PHILIPPINES IN 2022

19. RECOMMENDATIONS

20. 20
COMPANY NAME
RECOMMENDATIONS
• Security Awareness and Financial Safety
• Seamless Customer Onboarding
Experience
CUSTOMER-CENTRICITY
• Equip retailers up to the level of grassroot
Sari-Sari stores with the right tools to
accept payments.
• Prioritize MSMEs
RETAILER/MERCHANT
• Revisit existing KYC policies of Bangko
Sentral ng Pilipinas
• Balance between regulation and access
GOVERNMENT REGULATION
• Leverage on the experience and
knowledge of traditional financial
institution, take advantage the growth and
new technology of FinTechs, while the
government acts as the policy making
body and enabler.
COLLABORATION

21. The Future of Philippine
Payments Industry:
A Technology Foresight
by 2022
Maurice Gonzales
TM 299