The Bangko Sentral ng Pilipinas is currently in talks with the 44-member strong Bankers Association of the Philippines for the possible removal of transaction fees for small money transfers of less than P500 to further spur the use of digital payments in the country.
BAP is the lead organization of universal and commercial banks in the country consisting of 20 local banks and 24 foreign bank branches.
In his speech during the annual reception for the banking community Friday night, BSP Governor Felipe Medalla said this move would form part of efforts to prepare the financial system for the future.
“The first is digitalization and we have done great work there. The share of digital transactions in total payments has been growing steadily. Both InstaPay and PESONet have been great successes [in promoting payments digitalization]. And now… more and more people are using QR to make payments,” Medalla said.
Medalla said the efforts should not end there and digitalization must be 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 P15—it’s quite large relative to the transaction,” he said.
As of Feb. 1, 2023, there is no uniform amount of bank transfer fees via InstaPay. For instance, Asia United Bank charges P8; Bank of Commerce, P15 to P25; Bank of the Philippine Islands, P25; BDO Unibank Inc., P25; China Banking Corp., P10 to P25; East West Bank, P10; Land Bank of the Philippines, P25; Metrobank, P25; PayMaya Philippines, P15; Philippine Bank of Communications, P20; Philippine National Bank, P20 to P150; Rizal Commercial Banking Corp., P8 to P25; Security Bank Corp., P20 to P25; Standard Chartered Bank, P25; and Union Bank of the Philippines, P10 to P30.
Medalla expressed optimism that with the way that the BSP and stakeholders were able to work together in the past, both parties would also 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. And there is a way of sharing costs. I promise you, the central bank, will be in a greater hurry to cut reserve requirements so you can afford to give those [concessions],” Medalla said.
Reserve requirements are the minimum reserves required for depository institutions. They are set by the central bank within limits specified by laws for depository institutions. A change in the minimum reserve ratio affects the amount of its deposit base a financial institution can lend out.
Medalla earlier said the BSP may cut the reserve requirement from the present 12 percent within the first semester this year especially if monetary authorities are not pressured to increase the policy rates.