High Internet costs hamper Philippine e-commerce

The growth of electronic commerce in the country continues to be hampered by the high cost of Internet rates and the lack of access to computers. This adverse situation, however, has paved the way for the continued advancement of mobile commerce (m-commerce) due to the popularity and affordability of cellular phones.

“Transactions through mobile phones are starting to denote a significant role in boosting Internet commerce in the region,” said Mary Anne Tolentino, president of the Philippine Internet Commerce Society (PICS), in a phone interview with Computerworld Philippines. “With more than 200 million mobile phone subscribers, I would not be surprised if m-commerce picks up faster than PC-based e-commerce in the Philippines.”

Tolentino noted that although e-commerce has been around for a longer period, issues on infrastructure and the cultural mindset of Filipinos continue to hinder its full development.

Payment over the Internet, for instance, has proved to be quite difficult for local users. The most common payment gateway for online transactions is done using credit cards. Unfortunately, the situation significantly eliminates many probable users since only around 6 million Filipinos own credit cards.

However, several online stores such as Yehey have started to include ATM card payment systems such as PayPlus to make online services available to approximately 12 million ATM cardholders in the country.

The tentative attitude of Filipinos toward e-commerce is also impeding the development of the Internet, said Tolentino, pointing out that many local users remain hesitant to make use of e-commerce due to security fears and to try new forms of technology.

Despite these concerns, PICS is determined to push the growth of Internet commerce in the Philippines by regularly conducting seminars, exhibits and activities such as the National E-Commerce Congress to make people more aware of the benefits of conducting businesses online.

Tolentino noted that although the E-Commerce Act has encouraged more online transactions over the past years, it covers only a small portion of the broad spectrum of policy and regulatory issues needed to make e-commerce blossom. The greater challenge is to get more companies and consumers to accept this new method of doing business, she stressed.

Developing local Internet content is another initiative that should be explored, said Tolentino, as this will motivate individuals, businesses and the government to invest more in e-commerce and cash in on the opportunities it presents. PICS is also gearing up to assist more small and medium enterprises to go online.

Tolentino pointed out that although utilization of e-commerce remains limited to the business-to-business and the business-to-consumer transactions, business-to-government is starting to pick up as more government agencies such as the Bureau of Internal Revenue, the National Statistics Office and the Bureau of Customs are now conducting their businesses online.

“Trends in e-commerce will continue to develop in the coming years along with the upswing of m-commerce,” Tolentino predicted.