BSP Targets Street Stalls in E-Money Push, Sees QR Code Payments Rise by 5,600%


Bangko Sentral ng Pilipinas Deputy Governor Mamerto Tangonan has long wanted to make electronic money so ubiquitous that one could pay at a street stall via mobile phone. Now he’s leading the bank’s digital drive.

“This is my life’s purpose,” Tangonan said in a March 24 interview, his first since he took office in February.

Tangonan, 58, is point man for the BSP's push to convert half of all retail payments into digital form by 2023 and extend financial inclusion to 70 percent of Filipino adults through e-payment accounts. Pandemic restrictions are helping the effort: Amid curbs on movement, use of QR codes for personal transactions in the Philippines rose more than 5,600 percent last year.

Digital payments are widespread in parts of Asia, particularly in China, and have surged globally amid the pandemic. E-payments are seen as a gateway toward other services like loans and insurance, a boon for the 65 percent of Filipinos who don’t have a financial account -- the highest proportion among major Southeast Asian economies, according to the World Bank. Greater adoption of digital transactions could add as much as 3 percentage points to the country’s economy, central bank Governor Benjamin Diokno has said.

Tangonan said he’s first targeting the 88 percent of Filipino smartphone owners who don’t use their phones for payments. One strategy could be a national payments system based on QR codes that could be used in businesses ranging from family-run convenience stores to utility companies.

A unified, national bill-settlement facility is also in the works this year, Tangonan said.


“It’s hard to get critical mass if your payment system’s utility is low,” he said.

Photo by Bloomberg News.

‘Early Mover’

The Philippines was an early mover in digital payments, allowing funds transfer via mobile phones in 2001, according to the Better Than Cash Alliance, a United Nations-led initiative to quicken the shift away from cash. But widespread adoption and usage has been slow, it said.

Most Filipinos don’t know that electronic accounts and payments are available, while surveys show that many of those who do know don’t trust the service, Tangonan said.

The central bank is undertaking an aggressive social-media campaign to address this. More than half of Filipino adults have a smartphone, and nearly all are active on Facebook, Tangonan said.

The World Bank estimates Filipinos spend 10 hours a day on the Internet, the most worldwide, including nearly four hours on social media.

The central bank is also working with the government, telecoms and fintech companies to lower Southeast Asia’s costliest Internet service, Tangonan said. The bank had pushed to open up access to satellite services for Internet providers, a proposal recently approved by President Rodrigo Duterte.

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Government efforts to boost digital payments are a boon to local e-wallet operators such as GCash -- a partnership between Globe Telecom Inc. and Ant Financial Services Co. -- and PayMaya Philippines Inc., which is backed by Tencent Holdings Ltd.

Pandemic Boost

An engineer by education, Tangonan is relying on three decades of experience that includes helping PT Smart Telecom obtain an e-money license from Bank Indonesia and studying digital finance solutions for Tanzania’s farmers.

While use of digital payments has surged during the pandemic, Tangonan wants it to become much more commonplace.

“If I want to buy cooking oil or a vinegar at a sari-sari store, I can do QR or any form of digital payments,” he said, referring to neighborhood mom-and-pop stores. “That’s my vision.”

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