Growing affluence to drive card usage – Visa

MANILA, Philippines - Global payments solutions firm Visa Inc. sees steady growth in credit card use and other forms of electronics payments in the Philippines on the back of its sustained 69 consecutive quarters of economic growth.

Visa country manager for the Philippines and Guam Stuart Tomlinson said card payments have been increasing as card penetration rose to 11.4 percent last year from 9.2 percent in 2010.

Citing results of the Euromonitor Payment Study 2010-2015, Tomlinson said the share of cash payments of the personal consumption expenditure slipped to 82.3 percent from 84.4 percent while that of bank transfer, direct debit, and checks declined to 6.3 percent from 9.2 percent.

“Card usage is slowly but surely penetrating in the system but not as fast as we want it to be,” he said.

Tomlinson pointed out card usage contributed P4.6 billion to the Philippine economy and created 3,460 jobs between 2010 and 2015.

As the country’s gross domestic product (GDP) continued to expand, he explained spending among affluent Filipinos is on the rise. Affluent clients are those who spend P500,000 to P1 million and above.

 Holders of Premium Visa cards are driving electronic payments in the Philippines, making up 46 percent of total payment volume despite accounting for only 22 percent of total active cards in the market last year.

 Likewise, payment volume of domestic Premium Visa cards grew 33 percent outpacing the 8.6 percent expansion booked by all Visa cards issued in the Philippines.

 He said affluent Filipinos spend more than other segments with Visa Platinum, Signature and Infinite cardholders outspending the average Visa Classic and Gold cardholders by 169 percent.

The largest portion of affluent spending goes to retail with 18.7 percent followed by travel with 18.66 percent, supermarkets with 13.8 percent, restaurants with 6.8 percent, and fuel with 4.68 percent.

“Over the years Visa has introduced a series of cards to help Filipino consumers enjoy the convenience of electronic payments,” he added.

Visa partnered with Citibank in 2001 to launch the first Visa premium card in the Philippines.

 “Now, we are pleased to see nine partner banks issuing Visa Platinum, Visa Signature and Visa Infinite cards – with more bespoke propositions to cater to the growing affluent community,” he said.

 Reflecting their on-the-go lifestyle, affluent Filipinos also have an affinity towards travelling.  Asia is the top destination among Filipino travelers, accounting for six out of the ten top destinations by Visa’s payment volume. 

The top 10 outbound destination of Filipinos and their respective growth rates include the US with 39 percent, Singapore with 39 percent, United Kingdom with 41 percent, Hong Kong with 24 percent, Japan with 97 percent, France with 22 percent, Australia with 30 percent, Thailand with 52 percent, UAE with 57 percent, and Italy with 42 percent.

 “Visa is confident that our growing premium platform will enable our cardholders to make the most of their travel, providing discerning Filipinos with bespoke benefits they are not even aware are out there,” Tomlinson said.