ASSESSMENT ON THE AWARENESS, BEHAVIOR AND PERCEPTION

OF MILLENIALS ON CASHLESS TRANSACTIONS

IN SELECTED CITIES IN CAVITE

Name
Name
Name

An undergraduate thesis manuscript submitted to the faculty of the Department of

Management, Cavite State University, Imus City, Cavite in partial fulfilment of the
requirements for the degree of Bachelor of Science in Business Management major in
Financial Management with Contribution No._______. Prepared under the supervision
of Dr. Cynthia C. Facundo.

INTRODUCTION

Before the evolution of technology, like all nations, the Philippines’ form of trade

before colonization was the “barter system” in which they exchanged goods or services

for other goods and services in return. During the Spaniards reign in the Philippines,

they introduced the concept of coins to the country as a new form of currency. Later

on, they introduced ‘paper money’ and it became the prevalent form of payment in the

Philippines.

Arrival of the new age, and growth of technology, comes a new means of

making payments. These means are called cashless transaction. Cashless transaction

is a payment method that does not involve physical money. Instead of cold hard cash,

we use virtual money through the use of credit or debit cards, or electronic wallets (e-

wallets).

E-banking made a promising debut in the Philippines during the 1980s, with

the introduction of ATMs or the automated teller machines. This transformed how

people started to view the traditional banking system in the country.

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Following this, since the early 2000s, the BSP attempts to modernize the

Philippine financial system by enhancing its security through the issuance of over forty

regulations. Examples of these are the BSP issued Circular 649 on E-money and

Circular 704. Circular 649 focused on the regulation of bank-based and non-bank

based electronic money models. The latter, Circular 704, centered on establishing laws

encompassing the outsourcing of e-money issuers to e-money network service

providers. (Journal of SouthEast Asian Economies, Nair, 2016).

Today, ATMs are widespread, totaling 21,844 units as of June 30, 2019, per

BSP records,. Of the total, 44 percent are located off-site from bank premises. With

this, it’s safe to say that ATMs are now a major part of the normal banking routines of

the Filipinos especially in more urbanized areas and are considered integral to banks’

customer delivery methods.

As these kind of transactions enter the modern economy, it does not mean that

there is shortage in cash. Rather, cash transactions are just reduced and nowadays

people have learned to handle their money digitally with the use of electronics. Some

millenials today prefer using credit and debit cards; rising application Gcash; regular

or day-to-day basis for buying meals at fast foods and restaurants, shopping for

clothing, groceries; and even buying gas at gas stations. Even some highway tollgates

uses e-pass instead of paying in cash.

According to an article written by Maddy Savage, during the year 2017, the

most cashless country in the planet was found to be Sweden, as barely only 1% of the

value of all payments made in the country were made using coins or notes. As such,

from the study made in Wharton University of Pennsylvenia in 2018, due to Sweden's

strong card payment system, a popular mobile payment application, the country's

sturdy internet service framework, supportive leagal structure and its citizens' cultural

mistrust of cash, Sweden is regarded as the prime example for cashless countries
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and is expected to become the world's first cashless society by March 2023,. This

equates that cash transactions will no longer be accepted as a payment method in the

country (Knowledge@Wharton, Wharton University of Pennsylvania, 2018).

A passage written in World Payments Report in 2018, stated that in a research

from CapGemini, a French multinational consulting firm and BNP Paribas,a French

international banking group, Sweden recorded 461.5 non-cash transactions per

inhabitant in 2016 compared to United States which only has a record of 459. 6 non-

cash transactions per inhabitant. Thus, Sweden was able to usurp United States,

making it the country with the most noncash transaction per capita. As such, a future

of a cash-free society is highly plausible for Sweden and processes and studies toward

such goal must be taken seriously (Building A Cashless Society, 2019).

Because of the opportunities a cashless society provides, payment companies,

financial institutions and even government organizations from around the globe are

inspired by a myriad of reasons to dispel cash-based transactions.

One example is how unlike cash transactions, payments made electronically

or cashless payments, leaves digital footprints. These digital footprints make it easier

for anyone to track such dealings and allow governments to easily crack down tax

evasion schemes and hopefully end corruption. Also, the idea of a cashless economy

coming to fruition would help empower banks in bringing greater financial inclusion to

everyone.

People nowadays, are living in the world of digital technology where part of

everyday life is dependent on the technology. With the use of cashless transactions,

consumer’s no longer need to bring a big amounts of cash; instead, now they can pay

their bills or even buy the things, food, they want with the means of electronic cards

and/or mobile payments.

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Statement of the Problem

Generally, this study will make an attempt to analyze and find out how cashless

transactions has caused to changes in the behavior of millennials and level of

awareness and perception about cashless transaction.

Specifically it aims to answer the following questions:

1. What is the demographic profile of the millennial participants in the selected

Cities of Cavite in terms of:

a) residency;

b) age;

c) gender;

d) civil status;

e) employment status;

f) educational attainment; and

g) allowance and/ or monthly income?

2. What kind of cashless transactions that the millennial participants in the

selected Cities of Cavite are aware of in terms of:

a) network banking apps;

b) mobile wallets; and

c) plastic moneys?

3. What is the behavior of the millennial participants in the selected Cities of

Cavite on different kinds of cashless transactions in terms of:

a) payments;

b) budgeting; and

c) spending?

4. What is the perception of the millennials participants in the selected Cities of

Cavite on cashless transactions in terms of:

a) usage; and

b) security?
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5. What is the ranking of the most common reasons of the millennial participants

in the selected Cities of Cavite in using cashless transactions?

6. What is the opinion of the millennial participants in the selected Cities of Cavite

if the Philippines is ready to go cashless?

7. Is there a significant relationship between the demographic profile to

awareness, behavior, and perception of the millennial participants in the

selected Cities of Cavite to different cashless transactions?

8. Is there a significant difference between the awareness, behavior, and

perception of the millennial participants to different cashless transactions

among the selected Cities of Cavite in terms of:

a) Bacoor City to Imus City;

b) Bacoor City to Dasmariñas City; and

c) Imus City to Dasmariñas City?

9. Is there a significant difference between the awareness, behavior, and

perception of the millennial participants to different cashless transactions in the

selected Cities of Cavite in terms of:

a) awareness to behavior;

b) awareness to perception; and

c) behavior to perception?
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Objectives of the Study

Generally, this study will attempt to analyze and assess how cashless

transactions has caused changes in the behavior of millennials and their level of

awareness and perception about cashless transactions.

Specifically, it aims to:

1. Identify the demographic profile of the millennial participants in the selected

Cities of Cavite in terms of:

a) residency;

b) age;

c) gender;

d) civil status;

e) employment status;

f) educational attainment; and

g) allowance and/ or monthly income.

2. Identify the kinds of cashless transactions that the millennial participants in the

selected Cities of Cavite are aware of in terms of:

a) network banking apps;

b) mobile wallets; and

c) plastic moneys.

3. Determine the behavior of the millennial participants in the selected Cities of

Cavite on different kinds of cashless transactions in terms of:

a) payments;

b) budgeting; and

c) spending.

4. Determine the perception of the millennials participants in the selected Cities

of Cavite on cashless transactions in terms of:

a) usage; and

b) security.
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5. Determine the ranking of the most common reasons of the millennial

participants in the selected Cities of Cavite in using cashless transactions.

6. Determine the opinion of the millennial participants in the selected Cities of

Cavite if the Philippines is ready to go cashless.

7. To test the significant relationship between the demographic profile to

awareness, behavior, and perception of the millennial participants in the

selected Cities of Cavite to different cashless transactions.

8. To test the significant difference between the awareness, behavior, and

perception of the millennial participants to different cashless transactions

among the selected Cities of Cavite in terms of:

a) Bacoor City to Imus City;

b) Bacoor City to Dasmariñas City; and

c) Imus City to Dasmariñas City.

9. To test the significant difference between the awareness, behavior, and

perception of the millennial participants to different cashless transactions in the

selected Cities of Cavite in terms of:

a) awareness to behavior;

b) awareness to perception; and

c) behavior to perception.
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Significance of the Study

This research will provide the following value:

To Future Researchers. This study will help the students who will conduct

research about cashless economy, this study will serve as their reference.

To Students. This study will serve as their guide and reference to what cashless

economy is.

To Private sectors conducting cashless operations. this study will help them to

conduct their strategies to make their operations better for their customers satisfaction.

To Consumers using cashless transactions. Lastly, to learn more about how

cashless transactions may affect their spending behavior and avoid the risks of fake

currencies that may circulate in the country.

Furthermore, the findings in this study will provide knowledge of the pros, cons,

and purposes of using the cashless transaction system.

Scope and Limitations of the Study

The focus of this study is to find out the major factors and effects of cashless

transactions within selected cities in Cavite, namely the cities of Imus, Dasmariñas,

and Bacoor as perceived by the Millenial’s ages 23-38 years old. The following became

part of the considerations to achieve the main goal of this study which is to know if the

Philippines is ready to go cashless as well as the millenial’s awareness, behavior and

perception towards the cashless system.

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Theoretical Framework

With 500 respondents

from the Philippines, the results
highlighted the positive outlook
of Filipinos towards going
cashless. Even though cash
remains the top payment
method in the country, the study
showed lthat 75% of
respondents prefer using card
payments instead of cash.
- Visa Philippines Consumer
Payment Attitudes Study
(August 2019)

We also tend to see that

the use of cash differs between Surveying a dozen
rather similar countries like mobile payments companies.
Sweden and Germany where ASSESSMENT ON including PayPal and Visa,
THE AWARENESS,
cash is still very piopularin BEHAVIOR AND Forrester found that " The shift to
Germany while at the same time PERCEPTION OF mobile commerce was growinng
disappearing in Sweden and MILLENIALS ON quickly." Expectations that the
between urban and rural areas CASHLESS next 5 years " will be the tipping
where the use of cash tends to TRANSACTIONS IN point bringing mobile payments
be higher in rural areas than in SELECTED CITIES into the mainstream".
larger cities. IN CAVITE
- War of the Wallets: Patent
- Building a Cashless Society Landscape Analysis (2015)
(Niklas Arvidsson, 2019)

Few recent studies, provide

an overall assessment of the non-
cash payment industry, tending to
focus onspecific aspects of payment
technologies like mobile money. As
a result, there is a lack of academic
analysis on the challenges that tghe
Philippines faces in its march
towards becoming a "cash-lite"
society.
- Journal of SouthEast Asian
Economies,Volume 33 No. 3 (2016)

Figure 1.
Theoretical framework showing the supporting books and journals related to the
study.

The theoretical framework above contains relevant books and journals written

that depicts the idea of emerging cashless transactions affecting the behavior and

perception of people towards the use of new technologies in making monetary

payments
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Conceptual Framework

Dependent Process Independent

Cashless Transactions

Statistical Tools Demographic Profile of

Millennial Respondents
 Percentage  Age
ASSESSMENT and  Sex
ON THE Frequency  Marital status
AWARENESS, Distribution  Employment
BEHAVIOR AND Status
 Educational
PERCEPTION OF  Likert Scale Attainment
MILLENIALS ON  Monthly Income
CASHLESS  Mean
TRANSACTIONS Awareness on Cashless
Transactions
IN SELECTED
 Standard
CITIES IN  Network Banking
Deviation
CAVITE Apps
 Mobile Wallet
 Paired Sample  Plastic Money
T-test
Behavior on Cashless
Transactions
 Chi-Squared
• Payments
Test
• Budgeting

• Spending

Perception on Cashless
Transactions

 Usage
 Security

Figure 2.
Conceptual framework showing the input, process and output for the study.

The above framework represents the input, process and output of the study.

The independent data are the demographic profile of the millennial respondents,

awareness on the classifications of cashless transactions based on mobile wallets,

plastic money and network banking apps, their behaviors in terms of payments,

budgeting and spending, and the perception on cashless transactions in terms of

usage and security. The process that this data would undergo would be the usage of

the statistical tools to get the final data that will provide the outcome which is the

dependent data. The dependent data will constitute the awareness, behavior and
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perception of millenials on cashless transactions after the independent data is

processed using the statistical tools.

Definition of Terms

The following will be defined conceptually to clarify their meaning as used in this study.

Assessment - testing or judging something or someone through a different

types of methods or tools

ATM - (Automated Teller Machine) is an electronic machine that performs

basic banking functions such as handling deposits, check balances, and withdrawals.

Awareness - paying more attention and being mindful of what’s happening in

your surroundings

Behavior - it is the way a person act or react in a situation

Cashless transactions - it is a form of handling money by means of net banking,

mobile wallet and plastic cards with no physical bills or coins involved

Cashless Society – A society wherein financial transactions are not conducted

with physical banknotes or coins

Millennials - Also known as Generation Y. They are the generational

demographic cohort following Generation X; The generation of people born between

1980 and 1996

Mobile Wallets - a way to carry your credit and debit card information in a

secure digital form on your mobile device. . Instead of using physical plastic card to

make purchases, it allows you to pay with your smartphone, tablet or smartwatch in

stores, in apps, or on the web

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Net Banking - short for internet banking or online banking; an electronic

payment system where depositors can manage more aspects of their bank accounts

over the internet, rather than visiting a branch or using the telephone.

Perception - is how people see things in their point of view

Plastic Cards - also known for credit card, debit card, etc., which is issued by

the bank with the consumers payment information E-commerce. It refers to activities

that facilitates the acceptance of electronic payments for online transactions.

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REVIEW OF RELATED LITERATURE

According to global payments solution firm Visa, while cash still dominates the

Philippine consumer payment scene, almost seven to 10 Filipinos said that they were

confident with the idea of going cashless for a day, with only credit, debit or prepaid

cards to support them. Around 52% of those studied mentioned that they could last

using only electronic payments for up to three days. This study from Visa, shows that

most young people are comfortable with the idea of a digital lifestyle, and considers

paying through electronic means their go-to idea when going shopping or paying bills

(Doris Dumlao-Abadilla,BusinessInquirer.net, 2018).

Financial Times studies showed that in 2017, most Filipinos have switched to

using their credit or debit cards as their means of payment instead of using cash. From

the studied sample, 34% are credit card users, 39% uses debit cards while only 21%

of the sample used cash as their mode of payment. These results from the Financial

Times study, shows there is a rise in the demand for the cashless system mode of

payment in the country. Most common uses that Filipinos use the system for is to pay

for online shop purchases, money transfers, as well as paying bills and during physical

shopping at stores (AsianNikkei, 2017).

According to an article written by Jerome Carlo Paunan in 2018 entitled

‘Unveiling the 1st cashless Marulas public 'DigiPalengke’’, initiatives in forming

numerous cashless environments around the Philippines is on the works with

PayMaya innovating payments in New Marulas Public Market in Valenzuela City by

introducing QR codes on mobile wallets as its newest payment means, these services

are introduced to the daily lives of Valenzuela City’s citizens. With PayMaya equipping

QR payments acceptance to at least 200 merchants with what is now dubbed as

PayMaya's 'DigiPalengke' initiative, this opens up an opportunity for Valenzuela

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residents to integrate these services in paying for their day-to-day needs to even as

small as purchasing from the market.

Another leading mobile wallet platform, GCash, shows QR payment growth of

137% compared to its December base in 2017. This is according to an article written

in Manila Bulletin in 2018 entitled ‘GCash Cements Its Position As The Leading Mobile

Wallet In The Country’. With over 30,000 QR merchants , GCash has taken interest in

tapping into integral levels of transportation and retail sectors. In fact, a tricycle

transport group in Rizal have begun to accept GCash QR payments. This GCash scan-

to-pay payment technology is also made available to taxi operators in Cebu. This helps

passengers to pay their fares easier in exact amounts, as well as drivers, as they no

longer have to scramble for change which is normally seen when making large bill cash

payments for transport costs.

In the study 'Challenges and Opportunities of Electronic Payment Systems in

the Philippines’ Dr. Ching observed that Filipina women tend to be more trusting

towards the e-Commerce payment systems in the Philippines as opposed to Filipino

men. She also suggested that designing a more secured e-payment system and an

increase in more user friendly applications would help encourage more Filipinos in

trusting cashless transactions (Dr. Michelle Renee Ching,2017).

Yet, despite these studies, the Philippines' e-payments sector is still considered

as underdeveloped related to its potential according to the Journal of Southeast Asian

Economies of 2016 as shown by the country's eighteenth out of the twenty one ranking

in the APEC E-payment Readiness Index in 2015. This index was released by the

Australian APEC Studies Centre and TRPC which studies APEC economies readiness

to cashless payments (Journal of Southeast Asian Economies, 2016).

In line with this, a study made by Better Than Cash Alliance showed how critical

it is in our country to digitize retail payments as businesses make up only 1% on

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electronic payments usage, while individuals make up to only 0.3% of e-payments. In

addition, the study showed that most payment transactions per month are done with

cash, with its percentage amounting to around 99% of the recorded total payment

transactions in the country. Also, according to Zaldy Aguirre in his article Going

Cashless in 2017, compared to other ASEAN countries like Indonesia, Thailand and

Vietnam who generates 4-5 % of ecommerce transactions, the Philippines e-

commerce industry makes up only 1% of the country’s total commerce. He also said

that such results may be explained because around 86 percent of Filipino households

do not have a formal banking relationship.

Because of this, the Bangko Sentral ng Pilipinas advocates to promote the

National Retail Payments System or NRPS program of the BSP, to improve the

connection of its digital payment system to the other countries in the Association of

Southeast Asian Nations. The NRPS program is a policy and a regulatory framework

created by the BSP which aims to provide direction in how to operate trade payment

activities through BSFI’s or through the BSP supervised financial institutions. The

NRPS’ objective is to define complex strategies, provide ideologies and create

standards that if implemented, would lead to the formation of a safe, efficient, and

reliable e-payment retail system. The NRPS program intends to increase the

acceptance and usage of the electronic retail payments system in the country from the

1% e-payments practice in 2013 to a goal of 20% e-payments usage in 2020 (Bangko

Sentral ng Pilipinas, 2015).

Through the years, revolution in cashless payments have helped the

government in administration and in delivering social assistance throughout the

Philippines. With former President Aquino’s administration, the Philippine

government’s “No Corruption, No Poverty” campaign showed that significant

advancement has been made towards making its own e-payments A study made by
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Better Than Cash Alliance in 2015 accounts that around 16 million transactions per

month or 54% of all the Philippine government payments are now made digital.

Examples of these digitized payment initiatives made by the government is the use of

PhilGEPS, or the Philippine Government Electronic Procurement System. PhilGEPS

is a website wherein government agencies advertise their procurement requirements

which opens opportunities for electronic biddings, e-payments, and electronic dealings

in the use of public funds. Another is the CPC system or the Cashless Purchase Card

system, a program lead by the collaboration of the Philippine government and Citibank

Philippines in 2014. The government use the CPC for various government transactions

such as procuring construction supplies for minor projects, medical supplies, airline

tickets for executive travels, meals, as well as conveyance of important official

documents with the end goal being the augmentation in government transparency and

an attempt to totally eliminate corruption. The BSP also coordinates financial and

economic education programs which targets families in rural areas to improve their

financial literacy, and money management skills as well as prevent a culture of reliance

in remittance-receiving families (Journal of Southeast Asian Economies, 2016).

Although cash and checks is still the predominant payment method in some

parts of the world, the concept of e-payments, especially mobile payments, has gained

recognition and consumer acceptance in many countries due to the increase of

development in the mobile phone industries. European countries along with Asian

countries including Japan, Singapore and South Korea have embraced this kind of

technology. Nowadays, mobile phones can be used to purchase a lot of things, with a

definitive increase in usage of such means to purchase digital contents like games,

and music. Tickets, transport fares, and even parking fees can now also be paid in a

lot of urbanized countries with just the use of flashing your mobile phone in front of a

scanner at ‘manned’ and even ‘unmanned’ point of sales or POS systems. In fact, in

Japan, one can buy snacks or drinks by simply dialing a number at one’s mobile phone
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and have that snack or drink charged to the mobile phones’ bill. The increase in internet

usage, with people’s lives evolving to be interwoven with the internet and social media

sites paved the way for the increase of online payment consumption. As such, even

online banking has advanced its services and opened up to the idea of mobile banking.

With these online payment means, it not just enhances the traditional online payment

tools, but it helps in promoting total domination of the cashless payment system

(Bundesbank, 2017).

The journey of Asia towards cashless transaction is at an inflection point for

different reasons. First, because of the technological innovation , more users of smart

phones, and unique structural factors like demographics and urbanization are driving

adoption. Second, computerized arrangements can possibly give a huge number of

un- and underbanked individuals and organizations access to budgetary

administrations they recently needed. Filling this hole would make positive social effect

and monetary open doors for a more extensive shopper base. Third, mobile payments

are empowering nations to jump over credit/debit cards. Additionally, they are

frequently installed in a more extensive environment like e-commerce, fintech, and

social networks. Fourth, the government policy and guideline have been supportive.

(The Road to cashless societies, David and Gantori, 2018).

The younger generation opt for digital payments and are not raised with cash

in the same sense as previous generation were. It may well be that the future of cash

rests with the older generation. Some reserchers have proven that Swedish

consumers in general are reducing their use of cash and this improvement is likely to

continue because of demographic factor behind this pattern (Building a Cashless

Society (Niklas Arvidsson, 2019).

The overall number of retail payment is obviously not diminishing, a remarkable

opposite. In any case, cash payments are being supplanted essentially via card
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installments and mobile payment services like Swish. Card payments are utilized for

lower and lower values and therefore more frequently and covering more value

(Building a Cashless Society (Niklas Arvidsson, 2019).

In South Korea, the government promoted cashless payment by offering tax

incentives to the spending accomplished through cashless means boosting consumer

recognition of cashless payment. In Russia, the development in percentage of

spending accomplished via cashless means was driven by betterment of the payment

infrastructure (War of the Wallets: Patent Landscape Analysis (2015).

In nations like Belgium, France, Canada, the United Kingdom, Sweden,

Australia and the Netherlands, the expected cost of customer spending achieved via

cashless method was more than 85%, which indicates the good recognition level of

cashless technology in these countries and properly established infrastructure. the US

is not far behind these countries with 80% of client spending carried out thru cashless

manner. electronic payment is gaining government support in a few countries like

China, United Arab Emirates and South Korea as well. China registered the maximum

fast shift in the direction of cashless payment between 2006 and 2011 (War of the

Wallets: Patent Landscape Analysis (2015).

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Table 1. Examples of the Different kinds of Cashless Transactions

 GCash  Lazada
 GrabPay  PayMaya
Mobile Wallets  Bitbit  TagCash Wallet
 Coins.ph  Apple Pay
 Denarii
 DragonPay

 In-store Cards
Plastic Money  Credit Card
 Debit Card  Pre-paid Cash Cards

 Allied Bank  Land Bank of  Rizal

Net Banking  Asia United the Commercial
Bank Philippines Banking
 Banco De  Metropolitan Corporation
Oro Bank and (RCBC)
 Bank of Trust  Robinsons
Commerce Company Savings
 Bank of the (Metrobank) Bank
Philippines  Philippine  Security
Islands National Bank
 Chinabank Bank (PNB)  Standard
 Chinatrust  Philippine Chartered
Commercial Postal Bank
Bank Savings  Sterling
 Citibank Bank Bank of
Philippines  Philippine Asia
 East West Savings  Union Bank
Bank Bank (PS of the
 Export and Bank) Philippines
Industry  Planters  United
Bank Development Coconut
 Hongkong Bank Planters
and  Premiere Bank
Shanghai Development (UCPB)
Banking Bank
Corporation
(HSBC PH)