Philippine Cash on Delivery Share to Stay Above 20 Percent Through 2027
In this article (9)
Cash on delivery will account for more than 20 percent of Philippine e-commerce transactions through 2027. That keeps the country as Southeast Asia’s most cash-reliant online shopping market, according to payments gateway Xendit.
Physical cash currently represents 23 percent of online transaction value on Xendit’s Philippine platform. That figure outstrips all five other Southeast Asian markets surveyed in its joint report with market research firm Cube.
Across Southeast Asia, cash on delivery is projected to fall below 25 percent of total e-commerce gross merchandise value next year. The Philippines will remain the only major regional market where paper currency holds over a fifth of checkouts.
Cash Holds 23 Percent Share
A persistent unbanked population, limited formal credit, and fear of delivery fraud slow the shift away from cash. In a survey of 6,000 online shoppers across six regional markets, including 1,000 in the Philippines, 12 percent of Filipino buyers said nothing would convince them to stop using cash on delivery. That group is double the size seen in neighboring countries.
Shopper habits are shifting at the margin. About 33 percent of surveyed Philippine consumers reported using cash on delivery less frequently than a year ago. Discounts and cashback offers prompt them to try digital alternatives. Long-term retention still requires fast refunds and fraud protections.
“Looking ahead, across the whole Southeast Asia, COD payments will actually fall below 25 percent of all e-commerce payments, but the Philippines will still probably be one of the fewer markets that are going to be above 20 percent,” said Ina Gatan, head of go-to-market at Xendit Philippines.
QR Ph and Bank Transfers Surge 198 Percent
Account-to-account payments are capturing what physical cash loses. Transaction volume settled via QR codes and direct bank transfers increased 198 percent between January 2025 and April 2026 across Xendit’s merchant network.
“Across Southeast Asia, cash on delivery is projected to fall below 25 percent of total e-commerce gross merchandise value next year.”
National payment rails QR Ph and InstaPay drove the surge. QR Ph alone processed roughly 13 percent of total Philippine e-commerce value on the platform during the period. The standard lets merchant QR codes take payments across competing banking apps and digital wallets without custom point-of-sale setups.
Digital wallets grew by 3 percent over the same 16-month timeframe. E-wallets already dominate Philippine digital checkouts. That leaves little room for rapid percentage gains compared to account-linked instant clearing schemes.
Cross-Border Retail Lags Regional Neighbors
Reliance on cash creates an operational barrier for international merchants selling into the country. Cross-border purchases represented only 9 percent of total Philippine online retail volume in 2026. Only Indonesia recorded a lower share at 6 percent.
Higher digital adoption elsewhere fuels international orders. Cross-border sales accounted for 19 percent of online retail in Singapore, 15 percent in Thailand, 14 percent in Vietnam, and 12 percent in Malaysia. Foreign sellers rarely accept cash on delivery because of return logistics risks. That shuts uncarded Philippine consumers out of international storefronts.
Southeast Asian cross-border e-commerce is projected to expand between 11 and 19 percent annually through 2030, assuming regional instant payment linkages and customs procedures improve. Merchants relying purely on upfront card or wallet payments will miss a fifth of Philippine demand until alternative rails provide instant buyer protection.
Roadblocks to Digital Settlement
Handling cash on delivery imposes heavy costs on logistics providers and retailers. Couriers face higher failed-delivery rates, delayed settlement cycles of up to seven days, and cash-handling risks that drive up freight rates across the archipelago.
Couriers and platforms have introduced OTP verification at delivery and partial advance deposits to curb return rates. Even so, Valerie Cai, head of marketing at Xendit, estimated that bringing the Philippine cash-on-delivery ratio below 20 percent will require several years of sustained infrastructure rollouts.
Total Southeast Asian e-commerce merchandise value reached $197 billion in 2025, up from $3 billion in 2012, with Cube forecasting the market to pass $400 billion by 2031. The pace of payment digitization across the Philippine archipelago will determine how much of that regional growth turns into merchant profit rather than delivery losses.
Questions & Answers
Q.Why does the Philippines continue to have such a high reliance on cash for online shopping compared to other countries in Southeast Asia?
Why does the Philippines continue to have such a high reliance on cash for online shopping compared to other countries in Southeast Asia?
A persistent unbanked population, limited access to formal credit, and fear of delivery fraud slow the shift away from cash. Some Filipino buyers also state nothing would convince them to stop using cash on delivery.
Q.Which alternative payment methods are gaining traction in the Philippines, and how much have they grown?
Which alternative payment methods are gaining traction in the Philippines, and how much have they grown?
Account-to-account payments, specifically QR codes and direct bank transfers, saw a 198 percent increase in transaction volume on Xendit's network between January 2025 and April 2026, driven by QR Ph and InstaPay.
Q.How does the Philippines' high cash-on-delivery rate affect international online shopping for its consumers?
How does the Philippines' high cash-on-delivery rate affect international online shopping for its consumers?
Reliance on cash creates a barrier for international merchants, as most do not accept cash on delivery due to return logistics risks. This limits uncarded Philippine consumers from accessing international storefronts.
Q.What challenges do logistics providers and retailers face because of the high prevalence of cash on delivery?
What challenges do logistics providers and retailers face because of the high prevalence of cash on delivery?
Logistics providers face higher failed delivery rates, delayed settlement cycles of up to seven days, and cash-handling risks. These factors drive up freight rates across the archipelago for couriers and retailers.
Reader pulse
Is the Philippines' COD reliance an opportunity or obstacle?
19,777 votes so far