In the not so long past, when we say “pay using card”, the most common card that comes to our mind is a credit card but right now in 2021, not anymore! Yes, as the Philippines progress towards cashless transactions, banks and some institutions are now offering other ways to pay using the plastic card. It’s not a credit card or an ATM card but a prepaid cash card. Okay “prepaid cash card” is so vague so let us define first the monetary cards that we are currently using as of this writing.
- Credit card – it is a card issued by the bank to the holder for him to have an easy access to borrow money (as easy as swiping or tapping the card to the terminal). This card has a credit limit or the total amount you can loan. You need to pay your borrowed money after a month though there are programs to pay it in staggered mode and divide it to like 6, 12, or 24 months. Like most loans are, you will incur interest and other charges in this card.
- Debit card – some ATM cards have this feature (if it has Visa or Mastercard logo) because debit card draws money directly from the source pool from the bank provider like savings, payroll account, checking account etc. You can use this card if you know that your account has a balance. There are no interest charges in debit card and very minimal to zero fees.
- Stored-value card – this card acts same as a debit card but the difference is that you can have this even if you don’t have a bank account. Funding for this type of card is through payment centers, 7-11 convenient stores, money transfer facilities, mall customer service, or online banking. The stored-value card may act as gift card too because the monetary value is stored in the card itself.
Example of stored-value cards are GCash, Paymaya, SmartMoney, Beep, Starbucks card, Happy plus, H&M gift card, BPI Prepaid Card, Union Bank’s EON, and other prepaid cards. Yes, so this is what I am talking about “prepaid cash card”. I call it prepaid cash card because you have to pre-pay it by loading or top-up the card before using it.
Advantages of Stored-value card
The old generation of the Filipinos, the majority are not really into plastic money and they prefer cold cash. Because of that, the stores and some establishments that they own require buyers to transact using cold cash and that’s why ATMs always have a long queue, especially during payday. On the age of e-commerce, Filipinos are introduced and encouraged to use cards to purchase. This starts the sprout of stored-value cards because not all Filipinos have a bank account or credit cards. Stored-value cards bridge the gap between Filipinos and the e-commerce. Well, that’s not just the advantages of this kind of card to Filipinos, below are the advantages that I know of:
- Buying items online without the fear of bank account hack – because this card is reloadable, the user may opt to reload it according to the amount of his or her transaction whether it’s online or POS and this may also be a disposable card. So, if this will be hacked, the only amount that the hacker may get is the amount in the card. If stolen, depending on the card provider you can actually just forget it and get a new one.
- Perks like rebate or promos, the most common cards that offer these are GCash and Paymaya. You will get a rebate or discount if you will purchase a mobile phone load, sometimes a discount for booking a movie, order to some shops, or when buying in Lazada.
- Points to earn to use for travel, this is what GetGo card of Union Bank or Robinsons or Cebu Pacific is all about. Though it’s only Union Bank’s GetGo is the true blue comprehensive stored-value card (similar to GCash, Paymaya, or EON) because Robinsons and Cebu Pacific ones are more of patron cards where inputs are dictated by the points earned and output is dedicated for travel, like fare or hotel discounts.
- Gift card – If you are running out of idea or on a rush to give a gift, gift cards are the best ones because they are like the Chinese âng-pau (red envelope). You or the recipient can top-up this card, however, it can be used for a specific store only and not as comprehensive as GCash or Paymaya. Example of gift card is H&M card.
- Affordable money transfer, we Filipinos especially the working millennials are very familiar with this when we send money to our relatives or to the sellers. Stored-value cards like GCash, Paymaya, and EON, we can send money in real-time in just a few taps on the mobile app where the card is linked.
- Paying bills – no more wasting time on long queues, pay it through their mobile app and it’s very convenient though not all merchants or service providers are registered it’s good to know that we are starting to have one and I am hoping that someday all of them can be reached through this payment system.
Establishment of the National Retail Payment System (NRPS)
The Banko Sentral ng Pilipinas (BSP) backed this, in fact, their goal is to increase adoption of electronic retail payments from 1% in 2013 to 20% by 2020. They establish The National Retail Payment System, a policy and regulatory framework that aims to provide direction in carrying out retail payment activities through BSP supervised financial institutions.
We are not as advance as other developed countries that are now enjoying mobile phone payment system like Google Pay or Apple Pay but it’s great to know that we are slowly catching up. As of now I think it is still better to educate the Filipinos about cashless transaction through plastic cards before jumping to mobile payment systems and to let them understand the advantages, disadvantages, risk, and hone their financial literacy.