CCAP at 41: Helping drive agenda toward cash-lite Philippines

MANILA, Philippines — Cash is no longer king as more consumers turn to digital channels for their financial transactions amid the COVID-19 pandemic. 

Against this backdrop, there has been a spike in advocacy initiatives toward responsible use of credit cards and enhanced protection of cardholders.

As it celebrates over four decades of existence, the Credit Card Association of the Philippines (CCAP) provides Filipinos with better access to credit cards. This complements the goal of the Bangko Sentral ng Pilipinas (BSP) to transform the country from a cash-heavy to a cash-lite economy.

During the organization’s virtual 41st anniversary celebration, CCAP President Maria Magdalena “Mags” Surtida said credit card issuers are keen to introduce further improvements in processes and customer experience related to card issuance, including making transactions more secure.

“This virtual celebration shows how the industry is operating under the new normal. We have shown you how our industry worked together throughout the year with help from and collaboration among our Board members, committee members, and regulators,” Surtida said.

Under its Digital Payments Transformation Roadmap, the BSP aims to convert 50% of financial transactions in the country to digital form and raise the number of Filipino adults with bank accounts to 70% of population by 2023.

With the COVID-19 pandemic serving as catalyst, the BSP and industry players have rolled out initiatives toward providing consumers with an efficient, safe and inclusive payments ecosystem. As a result, the volume of financial transactions done electronically leaped to 20.1% of total in 2020 from a mere 1% in 2013.

“We will continue to partner with our financial consumers, and remain committed and aligned with the thrust of our regulators, to realize a better digitized and financially inclusive Philippine economy,” Surtida said.

Through innovative digital products and services that cater to the needs of consumers, CCAP, in collaboration with regulators, is able to provide seamless transaction processing, thereby achieving efficiency and maintaining public trust in the industry.

The industry group also regularly engages payment networks as it adopts global best practices in relation to product innovation, technology use and adaptation to changing payment landscape and evolving consumer behavior.

CCAP Chairman Rolando “Rolly” Ebreo said the industry group continues to advocate for secure, responsible, and convenient use of credit cards as the pandemic pushes more people to go digital. 

 Ebreo noted that credit card billings, which had been dragged by the COVID-19 crisis, started to recover in the second quarter, although they remain below pre-pandemic levels.

“Despite the challenges we face in expanding our customer base and mitigating the rising delinquency levels, we have played our part in helping to cushion the impact of the pandemic on our credit card customers, championing resiliency and encouraging the Bayanihan spirit,” Ebreo said during the virtual celebration.

Other attendees to the virtual 41st anniversary celebration of the industry group were CCAP Founder Dino Crescini; representatives from payment networks Mastercard, Visa, JCB, UnionPay, Diners Club and American Express; and representatives from other organizations including the Bankers Association of the Philippines (BAP). 

What is the new normal?

Aisha Islam, Southeast Asia Products and Innovation lead at Mastercard, said there has been a shift in the spending habits of consumers as new payment methods arise. 

“Cash is no longer king. Consumers have embraced digital payments as a result of the pandemic,” Islam added.

Results from our Mastercard New Payments Index done in Asia Pacific showed that close to 70% of respondents said they would need less cash moving forward, while 70% said they were open to using digital credit or debit card to make online purchases.

Survey results also showed that 64% of the respondents said they had used a new payment method that they would have not tried if not for the pandemic.

Islam cited three emerging payment methods as the pandemic changes consumers’ payment preferences: QR (quick response) codes, biometrics and cryptocurrency.

“We were all using contactless methods to a certain degree before the pandemic. But almost one in two global consumers have switched their top-of wallet card to a contactless-enabled one since the COVID [crisis] began nearly two years ago,” Islam said.

Islam projected that this new consumer behavior will stay beyond the pandemic era. 

Visa Country Manager for the Philippines & Guam Dan Wolbert said consumers are becoming more digitally savvy. 

He cited the Philippines whose young population looks for speed and simplicity of transactions in terms of product and service delivery. 

“We see more people going digital for their everyday needs, including shopping at online marketplaces for necessities, ordering food online and digital banking. There is also preference for touch-less technology due to increased concern over hygiene resulting from the pandemic,” Wolbert said.

According to Wolbert, financial technology companies (fintech) and enablers reinvent basic banking user experience and provide best payment service to digital-savvy consumers and businesses. 

“The customer journey has become digital. Every digital customer’s journey starts with a seamless customer acquisition that is highly digital, thereby onboarding customers after undergoing a near real-time credit scoring and decision-making. This is now the backdrop of the credit card-issuing business,” Wolbert said.

Innovative products, services for digital savvy consumers

UnionPay International Southeast Asia Assistant General Manager and Philippines Country General Manager Zhang Qing said there is a need for credit card issuers to leverage on the opportunities presented by the pandemic through new and innovative products and services.

“We can see that they are already shifting from traditional in-store purchases to online and mobile,” Zhang added. 

Zhang cited the promotion of different kinds of innovative products, such as virtual cards and mobile payment under one package. He also cited the introduction of different products using QR Codes, traditional cards, and virtual cards and services that are developed based on the needs and trends of the market.

Yusuke Matsui, country manager of JCB International Asia Pacific in the Philippines, talked about how the COVID-19 pandemic affected travel, tours, and dining out.

“The pandemic is ongoing and it requires a different approach not only in the Philippines but around the world. We are facing a challenging situation but I believe it’s also a great opportunity for the market to take cashless initiatives to the next level,” Matsui added.

Matsui said cashless payments around the world are expected to further accelerate in the coming years due largely to the changing consumer mindset with various technologies.

“As you have seen, the pandemic has affected consumer activities, and the development of the credit card business was a timely response to this change. In order to react in a timely manner, it is necessary to make good use of the database statistics to predict the future,” Matsui said.

Andrew Hopkins, the senior vice president of Global Products and Pricing at Discover Global Network, which operates Diners Club International, discussed the emerging change that people will rely greatly on quickly evolving digital tools by 2025.

"Looking forward to the future, there are some new technology trends that will continue to impact the payments ecosystem. Connected commerce and the embedding of payments functionality in new platforms—connected cars, smart appliances, other devices enabled by Internet of Things technology, and of course increased bandwidth that the new 5G standard brings—means that our payments experiences will multiply across new platforms," Hopkins said.

CCAP ramps up #FightBudol

Amid the steady rise in digital transactions with innovative products and services, CCAP is ramping up its #FightBudolMovement. Its anti-fraud campaign has sparked conversations and disseminated information to millions across media platforms. 

“We plan to deepen our engagement with our cardholders to educate them about responsible credit and fighting Fraud or Budol,” Surtida added.

It also has the #SmartSpendingTip campaign to educate users on the responsible use of credit cards. 

CCAP said cardholders should be aware of all forms of fraud and online scams to protect themselves against cyber criminals and other fraudsters who engage in phishing, vishing, fund transfer scams, among others.

“The world has changed dramatically in the last four decades but our mission remains the same. We want credit cards to be the preferred mode of payment not only in the physical world but now also in the digital world. We know that this world will continue to change and new technologies will evolve. But we are hopeful that this unity of purpose and cooperation among peers and competitors will endure,” CCAP Executive Director Alex Ilagan said.

As the Philippine economy gradually recovers from the pandemic-induced recession, CCAP continues to collaborate with regulators and major stakeholders on the country’s digitalization and sustainability journey.