WorldRemit sees marked shift to digital

MANILA, Philippines — Leading remittance firm WorldRemit sees higher adoption of digital remittances by overseas Filipino workers (OFWs) as cross-border cash flows have adversely been affected by the pandemic.

Earl Melivo, country director for Philippines at WorldRemit, said recipients are continuing their shift toward digital receiving methods, particularly, remittances toward bank accounts and mobile wallet services

“Remittances are an important component of the Philippine economy. It has quickly become a digital affair for many (and a still increasing number of) overseas Filipinos sending money back home –both for those seeking a faster solution to getting money to loved ones, and as a first-time user forced to make the shift because of COVID-19, who have since realized the value of making transactions digitally,” Melivo said.

He said the upward trend of digital adoption would be sustained in both domestic and cross-border transactions.

“Sending money online simply saves them time, giving them more control and transparency over the transaction, and making each transaction much more convenient for both the sender and the receiver,” he said.

WorldRemit cited the emergence of digital banks approved by the Bangko Sentral ng Pilipinas (BSP).

“As more and more Filipinos adapt to the use of mobile wallets, the drive of local banks to higher depositor base and the granting of multiple digital banking licenses in the Philippines, we’re already seeing increased and sustained volumes towards these channels compared to the usual cash payouts,” Melivo said.

The BSP has granted digital banking licenses to Overseas Filipino (OF) Bank, Tonik Digital Bank, UNObank, Union Digital Bank, GOtyme and Maya Bank.

Nine other applicants who managed to beat the Aug. 31 filing deadline failed to qualify for the seventh and last digital banking license slot due to incomplete requirements.

With the continued globalization of the economy and the rise of e-commerce, cross-border digital payments are becoming even more relevant to everyday consumers.

Providers such as WorldRemit allow anyone to send money quickly and securely overseas from their devices without having to line up at a physical remittance center, and 95 percent of recipients often receive the full amount in a matter of minutes.

“WorldRemit offers reliability and accessibility to senders and receivers in more than 130 countries at competitive exchange rates. Our customers can also be sure that their money and personal information remains secure with our strict verification processes and digital security protocols,” Melivo said.

The 2020 McKinsey Global Payments Report noted that cross-border payments, or financial transactions between people or businesses from different countries, accounted for $2 trillion in payments revenue in 2019 alone.

The BSP now expects OFW remittances increasing by six instead of four percent this year amid the continued reopening of the global economy from strict COVID-19 lockdowns.

Personal remittances increased by 5.1 percent to $22.67 billion from January to August, while cash remittances coursed through banks grew by 5.7 percent to $20.38 billion.

As part of its committed to transform the country into a cash-lite from a cash-heavy economy, the BSP aims to shift 50 percent of total retail transactions to digital channels and increase the number of Filipino adults with bank accounts to 70 percent by 2023 under its Digital Payments Transformation Roadmap.