The Philippines is going cashless, but apparently not when the delivery rider arrives.

We use GCash to transfer money, scan QR codes at restaurants, and pay bills without leaving home. In 2025, 64.7% of retail payment transactions were digital, according to the Bangko Sentral ng Pilipinas (BSP). In 2019, that figure was just 14%.

Yet many Filipinos still prefer paying for online purchases when the parcel arrives.

A 2026 report by Xendit and Cube found that cash on delivery (COD) accounted for 23% of Philippine e-commerce transaction value processed through Xendit, the highest share among six Southeast Asian markets studied.

We clearly know how to pay digitally. So why do we still reach for cash when our orders arrive?

Digital payments are becoming part of everyday life. In 2025, QR Ph transactions surpassed card transactions in number for the first time. The number of business locations accepting digital payments also grew by 36.3%.

Metro Manila is especially connected. According to the Philippine Statistics Authority, 79.3% of NCR residents aged 10 and above used the internet in 2024, compared with 67.3% nationwide.

But access remains uneven. Many Filipinos still lack formal financial accounts, while others have limited connectivity or difficulty funding their digital wallets.

Age also influences digital-payment adoption. Visa's research found that QR-payment usage reached at least 50% across most surveyed age groups, compared with 31% among those aged 59 to 65. However, there isn't enough reliable data to conclude that older generations prefer COD more than younger ones.

Digital payments have become mainstream. COD has simply remained useful for certain purchases and consumers.

Consider ordering a ₱3,000 gadget from an unfamiliar seller. You can pay through an e-wallet immediately, but what happens if the product never arrives or isn't what you ordered? How easily can you recover your money?

COD allows you to pay only when the parcel reaches your doorstep. For some shoppers, that reassurance is worth the inconvenience of preparing cash and waiting for the rider.

Others choose COD for more practical reasons. They may not have enough money in their digital wallet, want to avoid cashing in, or simply prefer paying upon delivery.

But habits are changing. Xendit's 2026 survey found that 33% of Filipino online shoppers were using COD much less frequently than a year earlier. Only 12% said nothing would persuade them to stop using it. Discounts and cashback were among the incentives that could encourage others to switch.

The same person who regularly pays through GCash might still select COD for an expensive purchase from an unfamiliar store.

It isn't necessarily about a lack of digital skills. Sometimes, it's about how much uncertainty a buyer is willing to accept.

China faced a similar challenge when online shopping was taking off. Consumers were hesitant to pay unfamiliar sellers before receiving their orders.

When Alibaba introduced Alipay in 2003, its escrow system helped address that concern. Buyers paid through an intermediary, and sellers received their money after the transaction met the required conditions.

Alipay and WeChat Pay eventually expanded beyond shopping. Digital payments became common in restaurants, public transport, small stores, and everyday transfers.

By December 2024, China had more than one billion online payment users, representing 92.8% of its internet population, according to the China Internet Network Information Center.

China's success involved far more than escrow. Its large digital platforms, extensive merchant acceptance, and convenient payment ecosystem all contributed.

The Philippines already has GCash, Maya, QR Ph, and buyer-protection systems on major marketplaces. What we can learn from China is how useful digital payments become when the entire experience is convenient and dependable.

COD has a weakness that is easy to overlook: receiving a parcel doesn't mean receiving the right product.

Many couriers require payment before customers can open their packages. You could pay for a smartphone accessory and discover afterward that the box contains something completely different.

Ninja Van has warned about fraudulent sellers using legitimate delivery networks to distribute deceptive COD parcels. In some cases, the rider may have no knowledge of the fraud.

Problems can also occur during fulfillment. Parcels move through warehouses, sorting centers, delivery hubs, and riders before reaching their destination. Along the way, products can be lost, mishandled, stolen, or tampered with.

J&T Express introduced its Parcel Care program in the Philippines in 2025 to improve complaint monitoring and courier accountability. Other delivery companies also have tracking systems, claims procedures, and investigative controls.

But comparable public data on confirmed parcel fraud, investigation outcomes, and customer compensation remains limited.

Tracking tells us where a parcel has been. It doesn't always tell us whether the right product is still inside.

Whether a customer pays digitally or through COD, a dependable delivery and refund process remains essential.

For sellers, COD can be expensive. Orders are packed and shipped before payment is collected. Couriers handle cash, while failed deliveries can mean additional shipping costs, returned inventory, and delayed sales.

Digital prepayment can reduce some of these problems, although it also comes with processing fees and refund responsibilities.

So why not remove COD completely?

Because customers might abandon their orders.

In Xendit's survey, 41% of Filipino shoppers who had abandoned a recent online purchase cited the absence of their preferred payment method as the main reason.

A business might save on fulfillment costs by removing COD but lose more money through lower sales. Instead of forcing consumers to prepay, companies have an opportunity to make digital payments more attractive through reliable deliveries, simpler refunds, better buyer protection, and meaningful incentives.

The Philippines is already moving toward a more cashless economy. Xendit expects COD to decline, although it forecasts that the Philippines will remain the only one of its six studied markets where COD accounts for more than 20% of e-commerce transaction value in 2027.

But making payments digital is only part of improving online shopping.

Consumers should be able to trust that sellers will send the correct products, delivery companies will handle parcels properly, and refunds will be processed fairly when something goes wrong.

Businesses also need to recognize that payment preferences are not always about technology. Sometimes, customers simply want more control over when and how they spend their money.

COD doesn't need to disappear. Some consumers will continue to prefer it, and there are valid reasons to keep it available.

But as digital commerce improves, paying in advance should become a decision consumers can make with confidence, rather than a risk they feel they have to take.

The real test of a cashless economy isn't whether people stop using cash. It's whether they trust the entire transaction enough to pay without it.

Let's unpack it.