Una Cash sees Philippines’ Buy Now, Pay Later market to contribute 6.7 percent in GMV to

UnaCash, an in-app and in-store financing solutions provider based in the Philippines, expects the Philippines’ buy now, pay later (BNPL) market to contribute 6.7 percent in gross merchandise value (GMV) to the digital economy this 2024.

The forecast was made after a comparison of the volume of the country’s BNPL market from 2020 to 2023 to the growth rate of the Philippine digital economy during the same period, UnaCash said in a statement on Monday.

It is noted that gross merchandise value represents the total sales volume, or the value of goods or services sold over a certain period of time, through a customer-to-customer (C2C) exchange site.

BNPL’s forecasted GMV contribution this year is higher compared to what was seen in 2023 (4.88 percent) and 2022 (4.19 percent).

UnaCash observes that BNPL’s positive impact in the digital economy is primarily seen through these three channels: micro, small and medium enterprises (MSMEs), embedded finance and digital payments, e-commerce.

According to the statement, BNPL has become a preferred payment model for both online and offline retailers, enhancing their competitiveness and contributing to the overall digital economic landscape, especially in a country dominated by MSMEs.

Meanwhile, BNPL fosters trust in digital payment methods, where Filipinos perceive this as a “time-tested” financing service and budget management tool.

This leads to the further growth of digital payments, which eventually fuels the digital economy.

BNPL also acts as a crucial tool for e-commerce businesses, increasing average order values and propelling the sector’s growth.

The growing landscape for e-commerce is significantly intertwined with the growth of BNPL.

Spending in the e-commerce segment is projected to increase nine times by 2026 from 2021.

“Our latest findings suggest that the Philippines’ BNPL market is experiencing moderate yet stable progress — affirming its growing role in spurring economic growth,

“We are witnessing a notable shift in consumer behavior where there is a consistent rise in patronage for this mode of financing,” UnaCash product head Erwin G. Ocampo said.

Amid economic pressures, he also believes that the increasing adoption of BNPL services is reflective of Filipinos’ view of it as a convenient way of managing their spending habits.

Cited earlier research from the Bangko Sentral ng Pilipinas in April of this year, the statement noted that consumer sentiment improved in the first quarter of 2024, and they are also less hesitant about buying big-ticket items in the first quarter of 2024 and the next 12 months.

“While consumers are still wary of rising commodity prices in 2024 and less optimistic about their finances this year, financing options like BNPL remain great tools for making big-ticket purchases,” Ocampo added.

UnaCash said it remains committed to providing innovative financial solutions and fostering financial inclusion in the Philippines.

The platform believes that BNPL, when used responsibly, can be a powerful tool for Filipinos to navigate the changes in the digital economy.

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