Nexus Between Payments Digitisation and Cash Usage in the Philippines

Innovation in contactless payment technology, the COVID-19 pandemic, increased e-commerce, and enhanced transparency, security, and convenience have transformed the retail payment markets in the last few years. With these changes, many societies are seeing a move towards a cash-lite economy.

While the impact of digital payments is well documented, there hasn’t been an empirical study that looks into the extent of substitution between cash usage and digital payments in the Philippines, or one that considers the possibility that the digital payment chain, particularly at the retail level, still needs to be wholly digitalised. Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, recently released a discussion paper titled ‘Nexus Between Payments Digitization and Cash Usage in the Philippines’. The article provides a brief review of that paper.