MORE FILIPINOS are now using digital payments for their e-commerce transactions, shifting from the previous preference for cash on delivery.
“The Philippines is a cash-on-delivery market. But we did feel a change of behavior during the pandemic with more and more people shifting to online payment transactions,” said Neil Trinidad, chief marketing officer of Lazada Philippines, at Friday’s virtual launch of a credit card by UnionBank of the Philippines, Inc. in partnership with the e-commerce platform.
Mr. Trinidad said cashless payments in Lazada surged by more than two times during the period. He added monthly orders likewise doubled in the beginning of the year from 2019.
Meanwhile, UnionBank said their clients’ credit card usage went down in the past months as many brick-and-mortar shops were closed, said Antonio Sebastian T. Corro, UnionBank senior vice president and head of card business.
“There is no travel and a lot of usage of the cards are really meant for travel and entertainment. So these [transactions] are [by] people who are traveling, about booking and all those things,” Mr. Corro said.
Mr. Corro said their clients have been using their cards to spend on domestic consumption as spending temporarily veers away from travel and entertainment.
“We’ve seen a dramatic growth specifically on basic necessity — basically people ordering food online, clothing and other crucial things they are spending on. A lot of food delivery and supermarket,” he said.
For Lazada, Mr. Trinidad said customers spent on segments related to grocery, health and hygiene, electronics, personal care, fashion and even general merchandise.
“They’re using online transactions two times more. So it’s really a massive acceleration across categories,” he said.
The two companies’ credit card powered by Mastercard, Inc. will allow users to make digital transactions and receive Lazada points for a minimum spend of P200 on the platform.
Mr. Trinidad said applications for the card will be fully online and the credit limit will depend on the user’s profile. Clients may also apply for a supplementary card.
UnionBank’s net profit slid six percent year on year to P4.5 billion in the first semester as it ramped up loan loss provisions due to the pandemic.
The lender’s shares closed unchanged at P52.95 apiece on Friday. — L.W.T. Noble