THE NATIONAL Quick Response (QR) Code Standard or QR Ph has helped businesses grow and contributed towards the central bank’s financial inclusion goals, but improvements can still be made to encourage more small firms to use the facility.
“The use of QR Ph payments has been gaining traction as an alternative to traditional debit and credit card payments given the ease, convenience, and security of merely scanning the QR code compared to having to bring a card,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Mamerto E. Tangonan said in a virtual BusinessWorld Insights session.
“This trend is expected to continue given that merchant payments comprise over 70% of the total monthly retail payments in the country, of which only 23% is digital. Thus, digitalizing merchant payments is one of our top priorities in order to maximize its huge potential to further advance digital payments adoption in the country,” Mr. Tangonan said.
He said the BSP will continue to collaborate with the payments industry to increase adoption of the standard.
The BSP and the Philippine Payments Management, Inc. (PPMI) launched the QR Ph in 2019. The facility is used for digital person-to-person (P2P) transfers and person-to-merchant (P2M) payments through the InstaPay rail.
Under the BSP Circular No. 1055, the central bank required all participating payment service providers to adopt QR Ph for interoperability.
P2P transactions via QR Ph stood at 527,800 worth P5.4 billion at end-April, growing by 171.7% in volume and 252.5% in value year on year.
Meanwhile, the P2M facility is now available in over 473,000 merchant outlets nationwide, Mr. Tangonan said.
As of April, there were 28 and 17 financial institutions participating in the P2P and P2M facilities, respectively.
Stakeholders said the QR Ph standard improved the convenience of using QR codes for payments.
“The QR Ph introduces a standard that would allow us to eliminate the need to display numerous QR codes in our establishments and to purchase expensive electronic data capture system. This will help us simplify our operations further,” SM Mart, Inc. Executive Vice-President Dhinno Francis S. Tiu said.
Because of the facility’s interoperability, consumers only need to have one QR code and businesses can use a single system to scan and process payments.
“Prior to this, whenever a customer had to pay using their digital wallet, we had to manage different systems, we needed to have different sets of hardware to be able to complete the transaction. The QR code allowed us to simplify all of that,” Mr. Tiu said.
He added that the facility is highly secure as consumers receive real-time updates and direct confirmation upon payment.
The new use cases for QR Ph also encouraged more micro, small, and medium enterprises (MSMEs) to adopt the standard, said Go Negosyo Senior Adviser Josephine Romero.
“There was a lot of uncertainty at the onset of the lockdowns in March 2020. There needed to be a way to get out and still reach our market and still move our goods,” she said, noting that most small businesses were scared to use digital tools at the start of the pandemic, based on Go Negosyo’s own survey of MSMEs.
“Now, as early as the first quarter of 2022, once we got the surveys, probably 80 to 90% of the people there were saying that they actually had enterprise accounts for their digital payment needs,” Ms. Romero said.
“QR codes were not only used for payments (and) for contact tracing, but for many other uses, like marketing, like logistics and other operational needs of the company of the order of the enterprises,” she added.
MSMEs also found it easier to do their transactions via a single facility for better monitoring, Ms. Romero said.
“Their payments to suppliers are done through there. Their sales are also recorded there. And then this makes it actually easier for them to know how much obligations they have at the end of the month,” she said.
However, some MSMEs can’t afford the cost of adopting QR payments, Ms. Romero noted.
“The cost of POS (point of sale) terminals is also another concern that our small enterprises mentioned. And the fact that many of them, before they even got into an e-wallet, did not have banks,” Ms. Romero said.
MSMEs also face connectivity challenges, Maya Co-founder and Board Director Shailesh Baidwan said.
“We also recognize that for a lot of the MSMEs, they don’t necessarily have great data connectivity, and also need a little bit more handholding to set themselves up. We’ve actually created an ongoing sales force that goes across the length and breadth of the country, which helps some of these MSMEs,” Mr. Baidwan said. — K.B. Ta-asan