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Wednesday, August 30, 2006
More Pinoys pay for goods, services through credit cards instead of cash
More Filipinos now use plastic instead of cash to pay for goods and services, according to an official of Visa International.
Visa International country manager for the Philippines James Dixon said the firm has experienced growth in card sales—whether credit, debit or prepaid.
But while the payment processing card company saw its card sales rise, Dixon said many Filipinos still use cash in business transactions.
“The Philippines is still very cash-based. Educating the Filipinos to use credit cards remains to be a challenge,” he said during a press conference yesterday at the Cebu City Marriott Hotel.
He said the company has achieved a 25.9-percent growth in card sales volume during the first half of the year compared to the same period in 2005.
However, he cited data from the National Statistics Office that showed about 84 percent of transactions in the country still involve cash. Only about four percent are through cards, five percent with checks while seven percent use other forms.
Credit, debit
Credit cards, the most commonly used card in the market, allow holders to pay for purchases or services through a loan from the issuing bank. Debit cards, on the other hand, are those that are given to individuals who have savings accounts in the issuing bank.
People with no bank accounts but want to use card instead of cash may buy Visa prepaid cards, Dixon said.
He said offering prepaid cards is Visa International’s way of capturing the 59 percent or 31 million Filipinos who have no relationships with banks.
Dixon is also encouraging traditional merchants—those who still do not accept payments through credit or debit cards—in the Philippines to start accepting the card mode of payment as this facilitates commerce and tourism.
Dixon also revealed that visitor spending in the Philippines by International Visa cardholders increased to $630 million in the first half of this year from $425 million in the same period in 2005.
Overseas use
“A 48.4-percent improvement that bodes well for the country’s tourism industry,” he said.
Overseas usage by Philippine Visa cardholders also increased 16.6 percent to $11 million.
The low credit card use in the country is the reason Visa International continues to hold financial literacy seminars, to educate Filipinos on the benefits of carrying credit cards over cash.
“There are risks, especially (on) security, when you carry cash,” Dixon said.
“We remain very optimistic about the Philippine market. Our financial performance for the first half of 2006 is a continuation of significant gains that we have made over the past few years and we are confident that this growth trend will continue, especially with the coming of the Christmas shopping and travel season,” he added.
Dixon said Visa’s retail sales volume, payments made through Visa cards at merchant point-of-sale terminals and on the Internet, grew by 21.1 percent to P42.9 billion. (JBN)
For Bisaya stories from Cebu. Click here. (August 30, 2006 issue)
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