Welcome to the digital world! Gen Zs, millennials prefer to use e-wallets than cash

MORE and more Filipinos are transitioning to the use of digital wallets than carrying hardcash because of its convenience and safety.

As shown in Bangko Sentral ng Pilipinas’ (BSP) Financial Inclusion report for the third quarter of 2022, there were 84,299 recorded active e-money agents in the country, constituting a 134.4 percent increase from the previous year’s 35,959 record.

Moreover, BSP also said in its 2021 report that digital wallets like GCash and Maya are most preferred by the younger generations, the Generation Zs and Millennials, emphasizing the role of the COVID-19 pandemic in accelerating this digital shift.

Because Filipinos were confined in their homes for over two years after 2020, the majority decided to go digital with their spending and saving as the stringent lockdown protocols have prevented them from doing in-person money transactions.

In fact, consumer credit service Digido reported in April that over 5.8 million Filipinos have spent a total of 4.4 million hours using digital wallets, as cashless transactions have maintained its growth momentum.

Pros of using digital wallets

And since paying through e-wallets are just a few clicks away,  some have opted to fully transition from carrying hard cash to using digital wallets for their daily expenses.

Now, it is easier to pay in restaurants and other shops in just simple clicks — all you need is your phone, a decent internet connection, and your e-money stored in digital wallets.

According to licensed financial advisor Anj Gonzales, paying through digital wallets have been trouble-free for most of her clients.

This is true for 25-year-old creative Emily Ortiz.

In an interview with republicasia, Ortiz shared that because the majority of the stores in the country have been accepting contactless transactions, she decided to use Maya as her primary method of paying her bills.

She further said that she feels safer when doing digital transactions as she often gets anxious when carrying huge amounts of money when grocery shopping and purchasing other necessary household items and supplies.

Gonzales also said that digital payments are faster compared to face-to-face ones as people no longer have to queue in payment centers to pay their bills.

“Paying bills is a lot faster through online wallets because you don’t need to fall in line or go to the payment centers as you can just pay wherever you are as long as you are online,” she told republicasia in a separate interview.

This also applies to paying bills like electricity, water, and internet, as mentioned by Ortiz.

“Isang click lang or scan ng QR code, tapos na agad yung payment and hindi mo na kailangang lumabas,” Ortiz said.

College student Karl Cedrick Manlicmot, 19, added that it is easier to do money transfers with e-wallets. 

He also underscored that it is also faster to apply for digital wallet accounts compared to opening a bank account.

“Ang dali lang mag-open ng GCash basta may valid ID ka,” said Manlicmot. “You just have to wait for a couple of days tapos pwede mo nang magamit fully yung features nya.”

More importantly, saving hard-earned money can be safely done through digital wallets.

Take Randy Boganutan’s case for instance.

Just recently, he shared in a now-deleted Facebook post how he lost his P14,000 worth of savings due to termites.

Boganutan, a fourth year programming student, has been using the traditional carton-made piggy banks to store the money he earns from working part-time as a street vendor and freelance model.

Unfortunately, most of his savings were munched down by insects. Good thing he was able to save at least P6,000 for the over P20,000 he saved up for his academic needs.

He learned the hard way that it would be best to deposit his finances in digital wallets like GCash.

“Nag-open na ako ng GCash at bank account para doon ko na lang ilalagay yung mga susunod kong ipon kasi [na-traumatize] ako doon sa experience ko,” he told republicasia.

He also recommends his fellow Gen Zs to use digital wallets so they wouldn’t suffer the same fate.

The cons

Although convenient, Gonzales said there are quite a few disadvantages when it comes to using digital wallets.

There were times e-wallets can be subject to schemes.

One of her client’s Maya accounts was hacked by scammers. 

“Thankfully, there was not enough money when the hacker tried to transfer money,” she said.

She added that there are also extra charges like transaction fees in paying the bills using digital wallets.

Manlicmot shares the same sentiments.

He said the only downside he could see in e-wallets were the transfer fees applied when transferring money to other digital wallets and online bank accounts.

“Kapag magka-cash in sa mga convenience stores or GCash partners, usually malaki din yung fee kapag malaki yung money na ipapadala mo,” he said.

On the other hand, Ortiz said digital wallets are also prone to data breaches, citing the recent incident where thousands of GCash users noticed some unauthorized transactions on their accounts in May.

Tips when saving through e-wallets

Gonzales said it’s easy to save using digital wallets as long as they would practice self-discipline when it comes to their spending habits.

When trying to save money, the first thing they need to do is to track their expenses and bills. This would help them identify the amount of money they need to allocate for particular outlays, including food, transportation, health, and other miscellaneous expenses.

Listing down your wants and needs would also help.

“I usually advise the 50-30-20 rule. 50% goes to your needs, 30% for your wants, and 20% on your savings,” Gonzales said.

She also recommends using two to three types of savings accounts.

“Do not put all your savings in one account, it’s still wise to have two to three types, like one savings account in your bank, one on MP2 Savings or PAG-IBIG, and most importantly, secure your future by getting a VUL – insurance with investment,” she said.