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Over the counter (OTC) payments in the Philippines

Despite rapid online shopping adoption during the pandemic, Filipinos are still heavily cash-reliant. Five out of ten online shopping transactions are settled with cash. There are a number of factors which contribute to the cash culture in the country:

  • Low banking penetration in the country
    71% of Filipinos are unbanked. It is unsurprising as 510 cities and municipalities in the country have no banking presence.
  • Incoming injections

Most salary, government payments, remittances are injected via cash. As the majority of the population receives money via cash, it is likely that they will spend them in cash too.

In the Philippines’ cash reliant society, cash on delivery (COD) is the prime method for settling transactions, but over the counter (OTC) has also emerged as a viable alternative, for both shoppers and retailers.

Over the counter (OTC) payment is a payment method where customers deposit the money in person at retail locations such as 7-Eleven, Ever Superstores, Gaisano and Cebuana among others for items purchased online.

Xendit has enabled over the counter payments for our customers, through partnerships with 7-Eleven and Cebuana. The chart below shows the share of payment methods in the Philippines, where over the counter (OTC) payments comprised 15.89% of all transactions we processed in the last three months.

Over the counter payment is particularly popular for high value transactions. The chart below details the average value per transaction from all payment methods. The average value per transactions settled in over the counter payments is $480 or PHP 24,000, almost 6x of credit card transactions’ which is at $86 or PHP 4,300.

Such high value per transaction for cash payments can be traced back to Filipinos’ perception of digital payments security. While consumers are comfortable with making small amounts of payments via e-Wallets and other online payment methods, they tend to prefer making payments in cash for higher value.

Despite efforts from banks, e-Wallets providers and even governmental bodies to ensure the security of online payments, it seems to be difficult to change the old age perception.

How to accept over the counter payments

If your business is looking to expand in the Philippines, especially towards the rural areas with no banking access, you should consider enabling over the counter payments on your online store.

Rather than integrating with different partners one by one, which can take a long time and complex processes, consider integrating with a payment gateway like Xendit. With a single registration to Xendit, your business can enable various payment methods such as credit / debit cards, direct debit, e-Wallets and over the counter payments, to offer to your customers.

About Xendit

Xendit is a financial technology company that provides payment solutions and simplifies the payment process for businesses in Indonesia, the Philippines and Southeast Asia, from SMEs and e-commerce startups to large enterprises.

For many businesses, accepting payments online is new territory, but we’re here to help. We have helped 1000s of businesses come online and we’d love to help you too.

Find out more about Xendit, or sign up to try our dashboard!

Learn more about payments in Indonesia

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