Cash-on-delivery (COD) remains more entrenched in the Philippines than anywhere else in Southeast Asia, with at least one in five Filipino consumers still relying on it even as digital payments accelerate, according to a report from payments infrastructure company Xendit.

In a study co-authored with e-commerce analytics firm Cube, Xendit found that roughly 23% of Filipino consumers continue to choose cash-on-delivery for their online purchases — the highest share in the region. The findings, published in Xendit's E-Commerce Payments Momentum Report 2026, draw on a survey of 1,000 Filipino consumers alongside responses from businesses and transaction data from Xendit's payments platform.

"The Philippines is going digital. We see this very, very clearly, and we've been seeing it for the past two years. But still holds on," said Ina Gatan, Xendit's Head of Go-To-Market for the Philippines, speaking at a briefing on Thursday.

The persistence of cash comes despite a sharp rise in digital payments. Transactions made via quick-response (QR) codes and bank transfers on local e-commerce platforms surged 198% from January 2025 to April 2026, according to Xendit.

"I think the first number that we want to highlight here is 198% growth — from January of 2025 until April of this year, we saw 198% increase in QR and bank transfer payments across our platform, very specifically," Ms. Gatan said. "However, still with that growth, we're still seeing that about 20% of e-commerce transactions are still cash-on-delivery payments."

A Gradual Shift Away From Cash

The move away from cash is underway, though uneven. Of the 1,000 Filipinos surveyed, 33% said they now use COD less than they did a year ago.

"While one-third of Filipino respondents say they are using COD much less, 12% still say they prefer COD and nothing would encourage them to switch, around twice the level seen in most other markets," Xendit said in its E-Commerce Payments Momentum Report 2026.

Cube projects that COD payments will fall below 25% of Southeast Asian countries' total e-commerce value by 2027, though it noted the Philippines could be among the outliers remaining above 20%.

Filipino consumers who remain committed to COD said they would be willing to go digital if platforms offered incentives such as discounts or cashbacks. Still, Ms. Gatan said keeping buyers' preferred payment methods readily available and accessible will be crucial to retaining those who have already made the switch.

That matters because payment choice directly affects sales: the report found that 41% of Filipino consumers said they dropped a purchase when their preferred method was unavailable. Ms. Gatan identified this as Filipino consumers' top frustration in digital payments adoption, followed by security.

"For merchants, this means improving conversion requires a market-specific approach: broader payment coverage in some markets, stronger trust and security in others, and a simpler checkout experience where friction is the bigger barrier," the report stated.

Merchant Readiness Lags Behind

According to Xendit, e-wallet giant GCash remained the most used payment platform among Filipino consumers.

On the business side, 92% of firms surveyed said a broad range of payment options is vital to their growth. Yet a significantly smaller share — 12% — said their payment infrastructure is fully prepared for the next decade, meaning most respondents did not consider themselves fully ready even as transaction volumes climb.

Fraud ranks low among current concerns but looms large in executives' expectations: only 8% of business leaders cited it as their current top concern, though the share rose to 48% among those who expect it to become their leading concern within the next five years.

"For Philippine merchants, the next few years will mean managing three shifts at once: fast growth in realtime payments, a cash habit that is fading more slowly than elsewhere in the region, and fraud moving up business leaders' list of concerns," Xendit said in a statement. "The checkouts that hold on to sales will be the ones that offer the full range of ways Filipinos pay, with security built into each of them from the start."

Central bank data underscore the broader digital shift: digital payments accounted for 64.7% of the total volume of retail payments in the Philippines in 2025, up from 57.4% in 2024. It marked the first time the share settled within the regulator's 60%-70% target under the Philippine Development Plan. The central bank figure tracks total retail payment volumes nationwide — a different measure from the e-commerce checkout data at the center of Xendit's findings. — Katherine K. Chan