Banks open to scrapping online fees

MANILA, Philippines — Banks are receptive to the proposal of the Bangko Sentral ng Pilipinas (BSP) to remove the fees on electronic fund transfers on small value transactions.

Antonio Moncupa Jr., president of the Bankers Association of the Philippines (BAP), said the group shares and supports the central bank’s objective of financial inclusion by democratizing online usage of financial services, which includes reduction of bank-to-bank transfer fees.

“While transfer fees are determined by each bank, and the need to cover cost of technology, infrastructure, cybersecurity, consumer education and charges by the switch operator are imperative, the BAP maintains close collaboration with the BSP and stakeholders to ensure that the ultimate goal of financial inclusion is attained in a way that is efficient and sustainable,” Moncupa said.

During the Philippine Economic Briefing organized by the Philippine Chamber of Commerce and Industry (PCCI), BSP Governor Felipe Medalla said the industry is receptive to the proposed reduction or lifting of fees for electronic fund transfer.

Medalla told participants that the BSP is looking at lowering the reserve requirement ratio (RRR) or the amount banks are required to keep with the central bank in exchange for waiving the fees on small transactions or bank-to-bank payments.

“We’re literally bribing the banks to subsidize the small transactions. From what I hear from the BAP, they are receptive to this. And I look forward to more and more digital payments, especially the poor using their accounts, which have grown significantly,” Medalla said.

At the height of the pandemic, the BSP reduced the RRR of big banks to 12 percent. From a high of 18 percent, the BSP aims to reduce the country’s RRR, the highest in the region, to single digit by 2023.

Electronic fund transfers via PESONet and InstaPay continue to help grow the share of digital transactions in total payments steadily.

Latest data from the central bank showed that the value of electronic fund transfers coursed through the PESONet and InstaPay jumped by 36 percent to hit P955.9 billion in January from P702.6 billion in the same month last year as combined volume jumped by 25.8 percent to 58.922 million from 46.83 million.

In 2022, the combined value of PESONet and InstaPay transactions jumped by 36 percent to P9.94 trillion from P7.24 trillion in 2021 as volume increased by 21 percent to 633.46 million from 523.59 million.