The Philippines is still very much a paper-dependent country, according to a case study by the Better Than Cash Alliance, as a large part of the population remains unbanked: electronic payments amount to only one percent of the country’s P2.5-billion monthly payment transactions, while the rest are made up of cash and check payments. To address this, the Bangko Sentral ng Pilipinas (BSP) announced last year that it has begun working with banks and non-bank electronic money issuers to develop a national retail payment system (NRPS) for the country. This new system “is targeted to increase total electronic payments on retail transactions by 20 percent by 2020,” said BSP deputy governor Nestor Espenilla Jr. This major shift to a cashless economy won’t happen overnight, but entrepreneurs can prepare for it by offering several options to receive payment for their business.

From a customer-service perspective, it’s also beneficial to have multiple points of payment available; people are more likely to bring you business if you make it convenient for them to do so. Implementing an online payment service allows your business to receive payment from virtually any person—providing a user-friendly platform that caters to the needs of the increasingly digital customer. Denise Christine S. Gonzales-Bernardo, CEO of Indigobaby Inc., an online store for mommy and baby essentials, cites reliability and accessibility to customers as among the most important considerations when choosing payment methods. Each platform has its strengths; decide which one is best for you and your demographic:

All-in-one cards
IDC Philippines predicts that by 2019, retail payment methods will become even more interconnected, leading more Filipinos to frequently use all-in-one (AIO) cards—these are multi-service smart cards that can combine debit, credit, loyalty, transport, or gift card functions. One such AIO card is Globe’s GCash beep Mastercard, which cardholders can use for cashless shopping as well as to pay for their MRT and LRT trips. "With a flourishing retail industry, IDC believes that payment processes will be evolving significantly quicker than before as digital disruptions continue to come about,” says Linus Go, an analyst for IDC Philippines.

Online payment services
If your business is already accepting credit and debit card payments, then online payment services can either replace or supplement these payment modes. Online payment accounts also typically incur smaller fees than a traditional merchant account with a bank—which impacts businesses that go through many small transactions on a daily basis. Services like PayPal could well be the first option that you consider due to its popularity and ease of use. However, with convenience comes greater costs—it charges anywhere between 3.2 to 4.4 percent of every transaction plus a fixed fee for cross-border or overseas transaction, which is somewhat expensive. “For international clients, PayPal is best,” says Bernardo, “but since there are fees added to the total amount due to receive the payment, some clients opt for bank deposits still.”

Bank deposits and over-the-counter payments
If you take another route and open a merchant’s account with a bank, charges will be much lower, but there is a lot more work involved. But for merchants like Bernardo, “The most popular [mode of payment] still is by bank deposit, especially with online wire money transfers, which clients can now do with their smartphones. This is free and easy for everyone to use. It is also very easy to trace when payments are made, so this is still the most convenient for us at this time.”

So which one is the best? It all depends. In the end, you need to weigh the advantages of a costlier service provider, versus other lower-cost alternatives. In addition, you also need to consider the Filipinos’ cautious stance towards online or digital payments. Many customers still rather pay in cash or by bank transfer rather than trust credit cards. Look into your target market to find the right products for your business.