Scrapping of fees on ‘small’ online fund transfers eyed
The Bangko Sentral ng Pilipinas (BSP) is looking at the possible removal of fees on “small-value” fund transfers done on digital channels as part of efforts to encourage more Filipinos to use digital payments.
According to BSP Governor Felipe Medalla, one way to enable this is to reduce the reserve requirement for banks.
Currently, big players are required to have in reserve a minimum the equivalent of at least 12 percent of their liabilities.
At a reception for the banking community held on Feb. 24, Medalla said removing charges on small transactions was one way of making financial services more inclusive and enabling the poor to use digital payments.
As an example, Medalla said that a P15 fee for transferring P200 was quite large relative to the amount being sent.
“With the way that we’re able to work together in the past, we, the Bangko Sentral, and our partners in the banking system will be able to work together to find a cost-sharing system that excludes small payments from fees, provided it’s below a certain number of transactions, let’s say, three per day,” the BSP chief said.
Two systems that are now being used for electronic fund transfers are called InstaPay and PESONet.
InstaPay is a real-time, low value electronic fund transfer facility for transactions up to P50,000 each and is most useful for remittances and e-commerce.
For transferring higher values, PESONet is used and may be considered an electronic alternative to the paper-based check system.
The BSP data show that, as of the end of 2022, the most commonly charged fee for a fund transfer done by individuals—as opposed to organizations—through InstaPay is P15. However, the fees vary from zero (free) to P25 per transaction.
Since InstaPay was launched in April 2018 when there were 1,740 transactions that involved about P20 million, the monthly flows have risen to P383 billion done through more than 56 million transactions in December 2022.
According to the BSP, the rise in InstaPay transactions is mainly attributed to the wide use of internet banking and e-money transactions for domestic remittances, e-commerce, bills payment and other immediate low-value payments. INQ