IMPROVING cybersecurity for online payments systems with the help of artificial intelligence (AI) solutions can push financial inclusion in the Philippines, payments technology company Global Payments, Inc. said.
The company expects AI to boost the Philippines’ online payments system within the next three to five years.
Krishnaraj Tantri, senior vice-president for South and Southeast Asia at Global Payments, said in an e-mail interview that AI-powered tools can help improve cybersecurity, particularly fraud detection, in the financial system.
Alternative security tools like biometrics, tokens, or cryptograms can also be implemented in addition to AI to protect the integrity of online payments systems.
“To enhance payment security in the Philippines, we can adopt several innovative measures. AI technology significantly improves the accuracy of fraud detection, allowing for real-time monitoring and response to suspicious activities,” Mr. Tantri said.
“These methods involve encoding transaction data, which minimizes the risk of identity theft and fraudulent transactions.”
Making online payments systems more secure, improving tech infrastructure, and financial education efforts will benefit small and medium enterprises (SME), which could help push the growth of digital payments outside the Philippine capital, Mr. Tantri said.
“As many SMEs struggle to hire skilled talent in competitive fields like digital marketing, finance, and IT, AI tools will play a crucial role in automating manual tasks and enhancing productivity across various business functions,” he said.
“Currently, many SMEs lack awareness of the benefits of digital payments, such as faster settlements and reduced fraud risk. Educational initiatives are essential to inform these businesses about how digital payment solutions can streamline their operations and improve their bottomlines.”
The development of mobile banking solutions that cater to the needs of unbanked individuals can also boost inclusion, the company said.
These need to be supported by partnerships between the government, financial institutions, and fintech companies, Mr. Tantri said.
A possible initiative would be incentivizing the deployment of point-of-sale terminals in underserved regions, which would help enable SMEs in areas that lack infrastructure to accept digital payments, he added.
“This could include subsidies for merchants or partnerships with technology providers to reduce costs and increase accessibility.”
The share of online payments in monthly retail transactions in the Philippines stood at 57.4% in terms of volume and 59% in value terms in 2024, the latest Bangko Sentral ng Pilipinas (BSP) data showed. These are up from 52.8% and 55.3%, respectively, in 2023.
The BSP is targeting to achieve a 60-70% share of digital payments over total retail payments volume by 2028, in line with the Philippine Development Plan. — A.M.C. Sy