Constitution covering cashless payments in the works, BSP says
THE DAYS of using physical cash to pay for nearly anything and everything that consumers buy may soon come at an end.
Regulators are set to release by yearend a “constitution” for cashless payments in the country, covering rules that private sector stakeholders such as telecommunication firms and “plastic” money providers should have to adhere to.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor A. Espenilla Jr. said the goal would be to turn cell phones, and debit and credit cards as the main modes of payment for most Filipinos, even for those buying small items at community sari-sari stores (convenience stores).
“We’re working on a constitution for the national retail payments system,” Espenilla told reporters Thursday on the sidelines of a conference organized by Ayala-led Bank of the Philippine Islands.
Moves pushing for the increased usage of e-money were triggered, in part, by a plan by banks to hike ATM transaction fees in late 2013. The BSP prevented banks from imposing higher ATM fees.
A survey by Better than Cash Alliance, a multinational nonprofit organization backed by the Bill and Melinda Gates Foundation, found that over 99 percent of all retail transactions in the Philippines are done using cash or paper checks.
Regulators have emphasized the inefficiency of using cash. The BSP said physical cash is more prone to being stolen and more exposed to wear and tear.
“The idea is to be able to create an interoperable environment for the various kinds of e-payment systems” Espenilla said. “That means cards, mobile, point-of-sale devices so that we will be able to transact down the road all the way to merchant establishments, even stores,” he said.
Espenilla said the financial industry has made significant steps recently toward this goal. ATM networks Bancnet and Megalink—both owned by a consortia of banks—merged earlier this year.
Another major reform needed for the national retail payment system would be to get local telecom firms’ Globe Telecom and Smart Communications to cooperate.
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