ATOME FINANCIAL expects the Philippines’ buy now, pay later (BNPL) market to grow “substantially” this year amid the low credit card penetration rate and increasing digitalization in the country.
“The BNPL industry in the Philippines is poised for substantial growth, driven by increasing consumer adoption of mobile-first digital financial services, a growing middle class and young, mobile-savvy internet population,” an Atome spokesperson said in an e-mail interview earlier this month.
Citing industry data, Atome said credit card penetration in the Philippines was just at around 2% in 2022. Meanwhile, debit card ownership is at almost 10 times the number of credit cards in force, it noted.
“Cash is still the most prevalent mode of payment, although digital is catching up. What this means is there is a sizable credit crunch, especially among the underbanked who need it the most,” Atome said.
Atome’s in-house data showed their accountholders mainly use their cards for bills payments, groceries, and e-commerce purchases.
“We have seen very healthy organic adoption for Atome Card in the Philippines, growing at over 20% month on month in terms of cardholder base. We also see very high daily activity, with many Filipinos using the card for utility and telephone-communication bills, household groceries and e-commerce purchases, and can even be used overseas,” it said.
“So, the key is how to provide affordable credit but in a careful, risk-managed and fiscally prudent way, from both a consumer and lender’s perspective,” it added.
Atome said it will prioritize enhancing its BNPL card as their customers are asking for higher credit limits.
“We are exploring how to do this in a fiscally prudent, risk-managed and responsible way. At the same time, we will continue to invest in financial literacy and education,” it added.
The company will also look to grow its loan book through Atome Cash.
Atome will also sell embedded insurance to provide more comprehensive financial cover and protection for Filipino users through its partnership with Chubb. In March, Atome announced that it inked a regional partnership with the global insurer, with two insurance products called Bill Secure and Shopping Secure expected to be rolled out this year.
It added that it will expand its e-commerce partnership with Lazada and is also looking to partner with other platforms.
In June, Atome secured a three-year term loan facility from a consortium led by EvolutionX Debt Capital to launch new products in the Philippines, Singapore, Malaysia, and Indonesia.
Atome Financial, which is part of Singapore-based Advance Intelligence Group, is active in the Philippines as a BNPL firm.
Its full-year operating income doubled to $170 million in 2023, mainly driven by its BNPL business, it earlier said. — Aaron Michael C. Sy