Cash agents grow amid BSP push for digital transactions

MANILA, Philippines—The Philippines has seen a surge in establishments serving as cash agents—retail outlets that provide basic services as extensions of banks—during the pandemic, which the central bank welcomed as a step toward greater financial inclusion in the country.

At an online briefing, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the number of active cash agents grew by 242 percent from 17,000 in 2019 to more than 58,000 in 2020, marking a positive development in the BSP’s financial inclusion drive.

“Cash agents helped increase the percentage of cities and municipalities reached by banking services from 70 percent to 85 percent,” Diokno said. “They play a significant role in financial inclusion by expanding the reach of financial services beyond bank branches and transitioning the unbanked population from cash to digital transactions.”

The number of cash agents increased also amid an aggressive push by the BSP for Filipinos to shift to digital financial transactions due to the pandemic.

The central bank defined cash agents as retail outlets—small shops, convenience stores, supermarkets, pharmacies, and pawnshops—contracted by banks to offer basic banking services and perform real-time financial transactions for customers in far-flung areas.

They accept and disburse cash on behalf of a bank, allowing customers to perform self-service transactions, including deposits and withdrawals, balance inquiries, fund transfers and bill payments.

Earlier this year, the BSP reminded banks with cash agent operations to observe standards on disclosure, transparency, and effective recourse to protect consumers who are transacting with cash agents.

Marketing materials on cash agents should clearly indicate that the banking products and services offered by these agents are products and services of the contracting bank.

Additionally, uniform signage should be displayed in a conspicuous location within the cash agent premises to facilitate easier identification by bank customers.

A list of accredited cash agents and a mechanism for resolving cash agent-related concerns should also be posted on the bank’s website or other media platforms.

Diokno said the BSP plans to develop an agent registry which is a regulatory technology tool that will strengthen its supervision of cash agents.

This will facilitate standardized and timely collection of agent data and create a public database that will help customers locate the nearest accredited agents and the services they offer.

Cash agents and the proposed registry will support the “mutually reinforcing goals” of shifting to digital payments and financial inclusion, Diokno said.

TSB