BSP Urges Banks To Reduce Fees For Electronic Fund Transfers

The Banko Sentral Pilipinas (BSP) seeks to find ways to reduce or eliminate fees for electronic fund transfers to boost the government’s efforts to transform the Philippines into a cash-lite from a cash-heavy economy.

BSP  Governor Felipe Medalla said the central bank is ready to work with the industry to find ways to eliminate fees on small-value fund transfers and to incentivize more Filipinos to use digital payments.

During the annual reception for the Banking Community, themed “A Future-Ready Philippines: Digital, Sustainable, and Inclusive,” Medalla said that electronic fund transfers via PESONet and InstaPay continue to help grow the share of digital transactions in total payments steadily.

But Medalla also emphasized the need to make digitalization more inclusive.

“And one way to make it more inclusive, and I’m sure we can work together to achieve it, is if small transactions…will be free of charge so that the poor can also use digital payments. Because if the transaction is small and the fee is ₱15 – it’s quite large relative to the transaction,” Medalla said.

“And I’m sure, with the way that we’re able to work together in the past, we, the BSP, 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, three per day. And there is a way of sharing costs,” he added.

The latest data from the BSP showed that in 2022, the combined value of PESONet and InstaPay transactions increased by 36% worth ₱9.94 trillion compared to the 21% increase worth ₱72.4 trillion in 2021.

The BSP is considering other options such as cutting reserve requirements or the required level of funds to maintain by banks.

The BSP will also continue to boost its cybersecurity efforts to address emerging risks and maintain public trust in the digital financial ecosystem.

“Sometimes, when one event that is unpleasant gets reported and reported, it seems like it’s a lot more frequent than what it really is. That’s why, it is very, very important to address complaints very quickly. So, among these initiatives is the (cybersecurity awareness campaign) Check, protect, and report,” Medalla said.

Medalla assured that the central bank continues to champion financial inclusion in digitalization to establish a technologically advanced, environmentally friendly, responsible, and financially inclusive economy.

Source: Philstar