Philippines leads Asia-Pacific in mobile payments

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MANILA, Philippines — The Philippines has cemented its position as a mobile wallet-first economy, standing out as the only market in Asia-Pacific where mobile money services dominate online payments, according to a report by Entrust.

The study found that 55 percent of Filipino respondents prefer mobile money services when paying online, far ahead of traditional payment methods such as debit and credit cards at 13 percent and other digital payment options at 11 percent.

This makes the Philippines the clear leader in mobile wallet adoption in the region, underscoring a fundamental shift in how consumers transact.

“The Philippines is skipping some traditional payment methods because mobile wallets solve both accessibility and convenience in one solution,” William Cheong, strategic consultant for financial services in Asia-Pacific at Entrust, told The STAR.

The Consumer Payment Preferences in APAC report highlights how the country’s rapid adoption has outpaced regional peers, where reliance on cards and bank transfers remains stronger. Thailand, the next closest market, recorded just 22 percent preference for mobile money, followed by Malaysia at 12 percent and Vietnam at 11 percent.

This growing dominance reflects a broader behavioral shift among Filipino consumers, who are increasingly embracing digital channels not only for payments but also for banking services.

Across the region, about 80 percent of consumers prefer to interact with their bank through mobile apps, while 55 percent opened their most recent account digitally.

In the Philippines, this shift is even more pronounced, with mobile wallets becoming embedded in everyday transactions. “Filipinos are highly mobile-first in how they communicate, how they shop and manage their daily life. Payment naturally followed that lifestyle shift, making mobile wallets the default choice,” Cheong said.

He added that mobile wallets have helped bridge longstanding gaps in financial access, particularly for underserved and unbanked segments. By combining ease of use with accessibility, these platforms have enabled millions of Filipinos to participate more actively in the formal financial system.

The rise of mobile wallets is also reshaping the country’s broader digital economy. From large merchants to small neighborhood stores, businesses are increasingly integrating e-wallets into their operations.

“There’s compelling evidence that even everyday micro-retailers are integrating e-wallets into their core businesses,” Cheong said, citing data showing that usage among sari-sari stores has surged by as much as 75 percent.

Beyond convenience, digital payments are helping small businesses improve efficiency and record-keeping, while expanding services such as bill payments and remittances. This, in turn, supports financial inclusion and enables enterprises to scale more effectively in a digital-first environment.

The shift is also forcing traditional banks and card issuers to adapt. Faced with growing competition from mobile wallet providers, banks are accelerating digital transformation efforts by enhancing mobile applications, enabling real-time transfers and strengthening security features.

“Traditional banks are evolving to compete in this mobile-first environment,” Cheong said. “Users are now evenly split between opening accounts via mobile applications and in person, which shows increasing acceptance of digital onboarding.”

Card networks such as Visa and Mastercard are also responding by embedding their services within digital wallets through tokenization, ensuring they remain relevant as payment preferences evolve.

Interoperability is emerging as a key theme in this transition, particularly with the recent entry of global platforms into the Philippine market. The launch of Google Pay and its integration with local e-wallet players such as GCash is seen as a significant step toward a more connected payments ecosystem.

“When global platforms come into the market and integrate with local issuers and e-wallets, it expands consumer choice and acceptance points,” Cheong said. “Consumers expect flexibility across online and offline channels. There’s no single payment method that meets every need.”

However, the rapid shift to digital payments also brings new risks. As adoption increases, so does the potential for fraud and cyber threats, making security a critical concern for both providers and users.

“As adoption grows, the attack surface expands. It’s crucial to protect both user identity and transaction integrity,” Cheong said, noting that financial institutions must strike a balance between enhancing security and maintaining a seamless user experience.

Despite strong growth, barriers to full cashless adoption remain. Infrastructure gaps, particularly in rural areas, continue to limit access to reliable internet services. A significant portion of the population also remains unbanked or underbanked, while concerns over data privacy and fraud persist.

Financial literacy is another challenge, with some consumers still hesitant to fully embrace digital payments. “Education and awareness are critical to building trust and encouraging adoption,” Cheong said.

Still, the long-term trajectory points toward continued expansion of digital payments in the Philippines, driven by improving connectivity, innovation and greater collaboration across the ecosystem.

Over the next two to three years, Cheong expects the payments landscape to become more seamless and secure as new technologies emerge and competition intensifies among providers.

While mobile wallets are steadily displacing cash, Cheong noted that physical currency would remain relevant in the near term, particularly in informal sectors.

Data from the report showed that 48 percent of Filipinos still prefer cash for offline transactions, compared to 22 percent who favor mobile money and 20 percent who use debit or credit cards.

“Cash usage is declining, but it’s not going to go away,” he said.

Even so, the Philippines’ emergence as a mobile wallet-first market signals a turning point in the country’s payments landscape, setting a new baseline for how consumers and businesses transact.

“The Philippine shift to a mobile wallet-first market signals a new baseline for digital payments,” Cheong said. “Trust, security and seamless user experience are no longer optional. They are expected.”