Consumers today expect to have more choices at the checkout, beyond credit card payments. One payment option that is growing to be increasingly popular is digital or online bank transfer. In fact, the Bangko Sentral ng Pilipinas (BSP) reports 2.13 million more digital bank transfers in 2020, a month after the start of the quarantine.

How Bank Transfer Works

Bank transfer is the process of sending money from your bank account to another. It can also happen the other way around when your bank account is the recipient. Bank transfers usually occur electronically or through online banking now.

Factors That Favor the Shift

Low Penetration of Cards in the Philippines

Statistics show that credit card penetration in the country is shallow. People outside Manila and Cebu remain underserved and have minimal access to credit cards and personal loans. 2020 data by BSP shows that only 5.6 million Filipinos are credit cardholders out of its 109.6 million population. 

BSP Sets to Digitalize 50% of Transactions by 2023

BSP Governor Diokno stated their goal for Philippines to become a digital-heavy, cash-light society for more financial inclusion. To attain this, they target that 50% of all transactions must be digital by 2023 and that 70% of Filipino adults should have a formal bank account in that year. This will spur more online bank transfer usage in the near future.

Social Distancing Encourage Digital Payments

The pandemic has been a massive spur for financial digitalization as mobility restrictions encouraged people to utilize digital payments. As a result, Filipinos opened more than four million electronic financial accounts locally in 2020. 

Online Bank Transfer Benefits

On top of the factors that support the shift for online bank transfers, this process in itself has proven convenience and benefits.

• Speed

Transaction speed is one of the best advantages of online transfers. Online transfers can be initiated immediately and are processed daily, while credit card transfers can involve lengthy delays. 

• Money Management

Credit card debts have due dates, and failing to pay on time will result in interest and other accrued charges. On the other hand, paying via bank transfer helps avoid debts and even overspending because you can only pay with the amount you have. Transactions also have digital records that let one keep track of funds easier.

• Security

Keeping your card in your wallet can be risky. There’s always a chance that the card will be lost or stolen. But by using online transfers instead, this risk is eliminated.

Digitalization and How SwiftPay Can Help

Digital is growing to be the default preference for every aspect where this option is available. We go to Spotify for music, Netflix for shows, Google for questions, and Youtube for reviews. In transactions, digital payments have also taken a spike of as much as 5,000% in the Philippines alone.

While credit cards and e-wallets are widely used, there is a high value in enabling online bank transfer as an additional mode of payment. This is especially true for shoppers who want to pay in cash with a smaller transaction fee.

Business owners interested in adding digital payment options for their e-stores can sign up with SwiftPay here for a free demo and activation.