MOBILE WALLETS and other electronic payment methods are expected to account for a larger share of e-commerce transactions in the Philippines by 2028 as more Filipinos shift to digital methods for convenience, the International Data Corp. (IDC) said.
An IDC InfoBrief commissioned by global payments platform 2C2P and Antom titled “How Southeast Asia Buys and Pays 2025” showed that the Philippines’ gross e-commerce transaction value is expected to grow to $54 billion by 2028 from the projected $26 billion this year and the actual $16 billion in 2023, with digital payments likely to make up a bigger part of the total.
“Although the Philippines traditionally has a strong preference for cash, new payment methods such as mobile wallets are quickly gaining ground for e-commerce payments,” IDC said.
“The growing adoption of digital payments in the Philippines will likely lead to the displacement of older payment types such as COD (cash on delivery), and merchants must prepare for these changes,” it added.
Mobile wallets are expected to make up 30% of the Philippines’ total e-commerce transaction value by 2028, up from the 27% forecast for this year and the actual 24% share in 2023. This comes as the Philippines is expected to add 23 million mobile wallet users from 2023 to 2028, it said.
This is followed by domestic payments, which IDC expects to account for 25% of transactions by 2028, up from 24% this year and 23% in 2023.
Transactions via debit and credit cards will make up 22% of the total by 2028, also growing from the expected 21% this year and 19% in 2023. Buy now, pay later (BNPL) transactions will also grow to 6% of the total (from 5% this year and 4% in 2023), while those done with other payments method like cash will decline to 17% by 2028 (from 24% in 2025 and 30% in 2023).
“With a large proportion of unbanked and underbanked consumers, and consequently, limited access to cards, most consumers have turned to mobile wallets and domestic payments,” IDC said.
“Mobile wallets are the clear winner due to their accessibility, and growing acceptance both online and offline,” it added. “Other payment types such as domestic payments have also seen significant growth, with real-time transfers through InstaPay and PESONet growing 33% in the first quarter of 2024 compared to 2023. This growth is expected to continue.”
Data from the IDC showed that cards and mobile wallets are the top two most accepted payment methods in the Philippines in 2024, with 86% and 77% of merchants able to process these transactions.
“Transactions using mobile wallets as well as domestic payments in the Philippines have become more seamless for merchants due to government initiatives such as QR Ph which has created a unified standard that simplifies the acceptance of digital payments,” IDC said.
“In the future, merchants will need to pay more attention to domestic payments such as RTPs (real-time payments) and bank transfers, as IDC forecasts their share of transactions to continue to rise all the way to 2028.”
The Bangko Sentral ng Pilipinas wants digital payments to make up 60-70% of the total retail payments volume by 2028.
The study also showed that Philippine merchants reported increased preference for contactless or NFC payments in the past 12 months, along with mobile payment apps and mobile wallets, similar to other markets in Southeast Asia (SEA).
“Merchants in the Philippines are also gaining interest in initiatives such as cross-border payments and cryptocurrency to further expand their customer base,” IDC said.
Cross-border commerce in the Philippines is expected to grow by 5.8 times to $1.5 billion by 2028, it added.
The survey had 600 respondents representing enterprise merchants in the Philippines, Indonesia, Malaysia, Singapore, Thailand, and Vietnam, with 65% of them being the primary decision leaders for payments in their respective organizations.
Southeast Asia’s e-commerce market is expected to grow to $325 billion by 2028 from $137 billion in 2023, overtaking Australia, Japan, and South Korea, IDC said, mainly driven by the rapid adoption of digital payments.
Digital payments are expected to account for 94% of total e-commerce payments in Southeast Asia by 2028 from 87% in 2023, driven by domestic payments, mobile wallets, and real-time payments.
“The increasing share of digital payments in SEA’s e-commerce markets, as well as the changing ratios of digital payments, have prompted the need for merchants to adopt payments technology which enables them to keep pace with these changes and support popular new payment methods,” IDC said. — B.M.D. Cruz
