Cashless Society: Identifying the Current Factors and Challenges that affect the Behavior of Filipinos toward Digitalization of Payments in the Philippines

The Philippines is one of the countries in the world where physical cash is still widely used. With the developments and trends relative to Information and Communication Technology (ICT), the usage of innovative technologies has accelerated change in the way business transactions are conducted (Riffai, 2011). Many developed countries have already embraced current advancements in performing economic transactions, particularly in the realms of digital payments and e-commerce, because these innovations provide lower transaction costs and improve the efficiency of each transaction. In the Philippines, despite the effort and topdown support of the government, through its central bank, the country still has heavy reliance on the use of physical cash and cheque mode of payments (Ching, 2017). But recently, due to the COVID-19 global pandemic which emerged in the first quarter of 2020, the shift toward digital payments has become mandatory to reduce the need for mobility and adhere to the health protocols that restrict the face-to-face conduct of activities and transactions. It somehow pushed the country to also take part in the innovations of handling and performing economic transactions digitally. This paper will explore the factors and challenges that affect the behavior of Filipinos in the adoption of digital payments being offered in the Philippines. These will be measured through the lens of Unified Theory of Acceptance and Use of Technology (UTAUT) model, which proposed that the variables that affect an individual’s intention and behavior to use a system are Performance Expectancy, Effort Expectancy, Social Influence, and Facilitating Conditions. Data was collected from working individuals with experiences and knowledge in using digital payment platforms. Survey instruments were deployed online, and descriptive statistics for frequency and percentage, and inferential statistics analysis using multiple regression were used in data analysis. Results of this study show that performance expectancy, effort expectancy, and facilitating conditions influenced the willingness of customers to adopt digital payments. These key constructs shall be considered by the government and concerned business sectors in developing and improving the current status of digitalization of payments in the country.