Taking Advantage of the Tap-Tap Economy

Ken Isaac Boltiador
December 21, 2022 (Archived)

Technology has given us the power to actively participate in the economy with the ease of tapping the screens of our phones. Ladies and Gentlemen, this is the Tap-Tap Economy, wherein being a buyer or seller in the economy is as easy as with the tap of your fingertips. The term Tap-Tap Economy is derived from the tapping of one’s screens to do economic activities such as buying, selling, transferring funds, and being a part of the market. 

Whether we realize it or not, we may have in one way or another participated in the Tap-Tap Economy. We are also able to transact using digital wallets such as GCash, Paymaya, Coins.PH, and much more. Sending or Receiving money in short time and far distances or even making online payments for bills has never been easier. As individuals, we maximize the use of these modes of payment, yet there are also individuals who can take the better advantage of it: MSMEs.

Micro, Small, and Medium Enterprises (MSMEs) have been on the rise especially with the prevalence of online selling powered by Facebook’s Marketplace and other online shopping stores. Students have also explored their business-savvy sides by starting online businesses using these modes of payment.

As easy it is to set-up, it is also easy for these MSMEs to exit the market without having substantial losses. However, if there is one thing online sellers wish for, it is the opportunity to stay in business. Although there are many factors for these MSMEs to stay afloat such as the demand for their products and their ability to supply these products, one thing that can make or break an online business is how they interact with customers. 

Making processes simpler and more convenient for customers gives them an incentive to purchase products, which according to N. Gregory Mankiw, is a valid behavioral response from consumers. One of the ways to enable this is to maximize the use of the digital wallets. In this article, three ways on how one can maximize the use of digital wallets will be revealed, which you may try out.

Digital Wallets provide a clear advantage for MSMEs to make interaction with customers much easier. The first step on optimizing the use of Digital Wallets to cater to customers is having a digital wallet account with the well-known digital wallets. Grit.PH recognizes GCash, Maya (formerly known as “PayMaya”), and Coins.PH, as the more well-known e-wallets in the Philippines. Considering having any of the three e-wallets is a step closer to making your clients have a convenient transaction with you. It also allows easier identification. 

As an online seller, it is important to remember that the e-wallet account, even if it is attached to your name, is always associated with your phone number and your brand. Likewise, making your online business or MSME available in digital wallets allows customers to trust you more. 

It provides an incentive for clients to interact with you with convenience. Limiting the options on how you can transact with your clients can be an incentive for them to back-off. It is a well-known economic principle, as Mankiw suggests, that “people respond to incentives”. Giving them a hint of convenience in transacting with you is a good start for your business.

An advantage of having a digital wallet in the first place is it allows you further reach to customers. It opens your doors to clients who have different preferences in paying or transacting with you. 

Some clients prefer paying digitally rather than cash, in some circumstances, especially those who don’t want to find the nearest ATM just to have cash to transact with you. Likewise, having a digital wallet allows you to conveniently transact with clients over long distances. All you need is your account number and the transaction is made.

This, however, poses a security threat to you as the holder of the digital wallet, which exposes your phone number, which is your personal data. 

There are ways however to mitigate this.

Not publicly advertising your E-Wallets account number for normal transaction is a good start. It is a best practice to reveal such details only to your customers, especially when you both are dealing in good faith. 

Another way to ensure the security of your account and building an image your clients can trust is having a fully-verified account. 

Having your digital wallet accounts verified is a good start to know that your clients can trust you. Although it is possible for clients to transact with non-fully-verified users, it leaves a hint of distrust to the clients. 

Likewise, if possible, you should also separate your personal digital wallet and your MSME’s or online store’s wallet. Perhaps using a different number for such will be good. GCash allows up to three digital wallets under the same name using different mobile numbers, which allows you to separate your personal e-wallet and your MSME’s wallet. Maya only allows one digital wallet per person, which is why it is best to align such with your MSME’s GCash digital wallet if you so choose to have both. 

Another way of gaining your client’s trust is also sharing with your clients the receipt confirmations of transactions. It is best to always update your clients as a sign of respect. It gives your client the incentive to know that they are dealing with people in good faith. It is a win for the client, and also equally a win for you.

We discussed some advantages and disadvantages with creating an e-wallet in the first place and the economic benefits it provides to you as a player in the Tap-Tap Market. Yet, there are other practices using these e-wallets in ensuring the wellness of your operations. The second tip on optimizing the use of e-wallets in your MSMEs or online businesses is to never leave your e-wallet empty. 

Although you are not required to dispense change to your clients assuming the clients give you the exact amount you asked for, leaving spare change in your e-wallet has benefits. The standby cash in your e-wallets can be used to shoulder expenses pertinent to your services such as delivery fees, or other implicit expenses incurred when operating your online business. 

Likewise, having standby cash can also prepare you for making purchases needed for your business. If you are asking how much exactly should you keep on standby, it depends on you. As the business operator, it is within your knowledge on which expenses are incurred as you operate. Keeping an amount a bit greater than the regular total costs in your operations can ensure that your e-wallets can be fully optimized.

However, be aware of the limits your accounts are entitled to. E-Wallet service providers generally set a limit on how much you can hold in your account, how much you can transact with per day, and other limitations. 

Consider these when deciding on how much you decide to keep in your e-wallet.

It is also likewise a good practice to purchase and link physical cards affiliated with your e-wallet of choice (such as GCash Cards or Maya’s cards), which act as a debit card linked to your e-wallet. When withdrawing however, also bear in mind that the convenience fees may affect it.

In every economy, producing and selling a certain product can incur explicit and implicit costs: costs that we expect to have a monetary value and non-monetary value. 

A well-valued principle of Economics, as discussed by Mankiw, is the cost of something is what you give up to get it. 

When operating an online business or an MSME, it is important to ask yourselves the following questions: 

1) Where the cash is going to, 

2) Where the cash is coming from, and 

3) if it is the best alternative for earning the cash this way. 

We have already discussed two tips that can prove very beneficial in maximizing the use of e-wallets for online business and MSMEs, which brings us to the third one: Make use of Account Statements or Transaction Logs. 

GCash, Paymaya, and Coins.PH offer you the option to view your Account Statements and Transaction History. They let you know when and how much money is being debited or credited from your account. You can easily pinpoint how much money flows in and out from your account and have a clearer, ground-level view on how your business operations are economically viable.

Although it takes time, having the ability to monitor your cash in and outflows can help you optimize how your online business operates. It allows you the option to choose with transactions are necessary to allow you to benefit from more economic profit.

The Tap-Tap Economy has allowed us to save more time and distance in being part of the economy. Technology has resulted into the ease of transactions. Starting and maintaining an online business or an MSME has never been much easier thanks to technology. The tools, tips, and resources are available all-around for anyone, even students, to be players in this highly competitive tap-tap economy.