BSP waives fees for new e-payment services as people shift to digital transactions

BSP Gov. Benjamin Diokno. (File photo by EARVIN PERIAS / Philippine Daily Inquirer)

MANILA, Philippines — The central bank on Tuesday waived its fees and charges for financial institutions setting up digital payment channels, saying it encouraged Filipinos to conduct more online transactions as means of fighting the COVID-19 pandemic.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said its policy-making Monetary Board approved the suspension of charging of filing, processing, and licensing or registration fees relative to application to provide electronic payment and financial services.

This was meant “to encourage financial institutions to actively offer safe, efficient and reliable digital channels,” it said, explaining that this would also provide additional relief to these firms affected by the COVID-19 situation.

The central bank said digital channels such as online banking facilities and electronic money platforms that support critical payment use cases such as social benefit transfers, payments to merchants or billers including the government, payments to suppliers, and remittances have enabled continued access to basic financial services like payments, fund transfers and loan availment, and minimized the physical presence of clients in bank premises.

The relief shall be effective for a period of six months from March 8, 2020, the date of declaration of President Rodrigo Duterte of the state of public health emergency under Presidential Proclamation No. 922. This period may be extended depending on the development of the COVID-19 situation, the regulator added.

Yesterday, BSP Governor Benjamin Diokno also took note of the importance of shifting consumer behavior toward electronic payments, considering the limitations on people’s movement and activities during the enhanced community quarantine period.

“By using e-payments with due care and vigilance, Filipinos reduce their need for mobility and prevent health risks from face-to-face and over-the-counter financial transactions,” the central bank chief said.

Comparative data from before and during the lockdown showed significant decline in the volume and value of check payments and ATM withdrawals.

This downtrend reflects the effect of the quarantine on the check-based and cash-based financial transactions of businesses, households, and individuals. These data indicate a clear opportunity for digital payment channels and services, such as PESONet and InstaPay.

PESONet and InstaPay are electronic funds transfer services offered by BSP-supervised financial institutions for their account holders.

Fees for these services have in fact been waived for the duration of the quarantine period.

PESONet is appropriate for high value transactions of companies, other businesses, government entities, and individuals while InstaPay is used for urgent and small value retail transactions.

These mechanisms were established under the National Retail Payment System, a policy framework issued by the BSP in 2017 to provide an enabling environment for a safe, efficient, affordable and inclusive digital finance ecosystem.

Studies show that the volume of e-payments as a percentage of transactions in the Philippines grew from 1 percent in 2013 to 10 percent in 2018.

The value of these e-payments also rose from 8 percent of total transactions to 20 percent over the same period. The BSP said it envisions and accelerated uptake of e-payment services in the Philippines over the next three years.

JPV