THE country faces a continuing challenge in moving online shoppers toward shifting to digital payments for their online purchases, as cash-on-delivery (COD) remains more prevalent in the country than in other major Southeast Asian markets, study showed.
Xendit’s E-commerce Payments Momentum Report 2026 found that COD payment continues to account for about 23 percent of e-commerce sales in the country, the highest among the six Southeast Asian markets covered.
The study showed only 16 percent were accounted for in Vietnam while the share in Indonesia, Malaysia, Singapore and Thailand has become marginal.
While people are becoming less reliant on COD payments, Xendit Philippines Head of Commercial Ina Gatan said the shift to digital payments are slower compared to other Asian peers.
“It signals more people moving toward digital payments, but it’s still a little bit slower than what we’re seeing across the region from our neighboring markets,” Gatan told reporters in a media briefing on Thursday.
Cash is still king
Among Filipino respondents, 33 percent said they were using COD much less than they had a year earlier.
While this suggests that the payment method is losing ground among a portion of online shoppers, it remains a significant part of the local e-commerce market.
At the same time, 12 percent of Filipino respondents said they still prefer COD and that nothing would persuade them to switch to another payment method.
“When I talk to merchants, no matter how much they want to go digital, they always say in our country cash is still king,” Gatan said.
Gatan said that COD would become less common across Southeast Asia in 2027, forecasting that its share will fall below 25 percent of regional e-commerce value.
However, the Philippines is likely to remain the last major market in the region where COD accounts for more than 20 percent of e-commerce value.
Gatan said discounts and cashback offers were the most commonly cited incentives for shoppers across the six markets to move away from COD.
“Being able to provide a discount or a cashback at the time of the checkout when they choose a digital payment method versus cash on delivery, that’s the main driver that would make them switch,” Gatan said.
Faster and easier refunds, she added, along with greater confidence in payment security, were also identified as factors that could encourage digital payment adoption.
Digital payments diversify
Payment landscape in the country is also evolving, Gatan said, as QR-based payments and account-to-account (A2A) transfers gain traction.
Xendit’s platform data showed that QR and A2A payment activity in the Philippines increased by a combined 198 percent between January 2025 and April 2026.
E-wallet activity, by comparison, grew by 3 percent over the same period.
The report linked the expansion of QR and A2A payments to infrastructure such as QR Ph and InstaPay.
“We think that there’s a lot more growth here also because it’s a lot more interoperable,” Gatan said.
Across Southeast Asia, QR payments were the method most frequently identified by surveyed business leaders as experiencing the strongest increase in customer demand.
QR codes were selected by 32 percent of respondents, followed by e-wallets and bank transfers (20 percent), credit cards (12 percent) and buy now, pay later services (16 percent).
“The key takeaway is not convergence toward a single payment mix, but the coexistence of several mature payment behaviors across the region,” the report said.
“For merchants, this reinforces the need to support locally relevant payment methods rather than applying a single regional checkout strategy,” it added.
