MANILA, Philippines — The central bank wants single unified standard adopted across the entire digital payments landscape in order to expedite the transition into a “cash light” economy — a shift that has already received an impetus from the changes during the coronavirus pandemic.
Speaking to financial technology stakeholders recently, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said regulators are set to pursue more digital payment initiatives over the near term to promote interoperability among payment services which will, in turn, result in their more efficient use.
In particular, the central bank chief said he wants the use of QR or “quick reaction” codes to become more widespread more payments.
“From only person-to-person or P2P when it was launched in November 2019, [it] will soon include person-to-merchant or P2M payments,” he said. “Since accepting payments via QR [code] is simple and affordable, it is expected to benefit not only large business organizations but also the small unbanked vendors such as peddlers, sari-sari store owners, and other entrepreneurs.”
Diokno also wants to use of bill payment facilities — currently implemented individually by banks, companies and payment firms — to operaqte under a single standard.
“[This] aims to remove the inefficiencies associated with the current fragmented bills payment mechanisms,” he said. “The billers will be capable of collecting from their customers even if the payment service providers of the billers are different from those of the customers.”
Regulators also intend to create a more flexible way for businesses and consumers to make payments through the request to pay service.
“The payee will only need to send an electronic request for payment to the payer, showing how much is being requested for payment and when it falls due,” Diokno said.
Finally, the fourth initiative in the pipeline is the direct debit use case.
“Here, the payer sends the payee an electronic authority or mandate to draw funds directly from the payer’s account on a regular basis,” he said. “This case is ideal for recurring payments such as monthly rentals, periodic loan amortizations, and quarterly insurance premiums.”
Diokno had earlier said that his personal goals as central bank governor include having not less than 50 percent of transactions, by volume and value, to be done digitally by the end of his term in 2023.
“With the pandemic, I am optimistic that this goal will be met even sooner,” he said. “This is consistent with my other vision of shifting from a cash-heavy to a cash-lite economy. The speed and breadth of digitalization are gaining momentum. And we want to push harder.”