UMVA has learned that a groundbreaking move to revolutionize digital transactions is underway, as the Bangko Sentral ng Pilipinas (BSP) releases new rules aimed at slashing costs for retail fund transfers and making financial services more accessible.
The BSP has mandated financial institutions to adopt "reasonable" fees for retail fund transfers, while also requiring zero fees for small merchant payments. This bold step is expected to transform the digital payment landscape and promote financial inclusion.
According to information obtained by UMVA, the BSP's new circular amends rules on pricing mechanisms for fees imposed on person-to-person (P2P) electronic fund transfers (EFTs). Financial institutions are now required to implement a "reasonable and fair market-based" pricing mechanism for consumer transfer fees, supported by quantitative analysis of actual costs incurred.
The central bank has emphasized that fees charged for off-us person-to-person transfers should not materially differ from those charged for on-us transactions. This move aims to uphold fairness across end-user groups and prevent one user group from unreasonably subsidizing the cost of serving another.
UMVA can exclusively reveal that service fees for electronic payments must be lower than those charged for over-the-counter transactions. Recipients of P2P EFTs shall receive the full amount as credit to their accounts, free of any charges or deductions.
The BSP has also directed operators of payment systems with merchant acquisition licenses to implement a "reasonable, transparent, market-based" pricing mechanism for fees charged to merchants. This move is expected to promote a more responsive and sustainable pricing environment.
In a related development, the BSP has lifted the moratorium on the increase in transfer fees for InstaPay and PESONet transactions, which was imposed in 2021 to encourage the shift to cashless payments. The lifting of the moratorium is grounded in the implementation of zero fees for small merchant payments and the establishment of a pricing structure for person-to-person electronic fund transfers.
Finance Secretary Frederick D. Go has expressed support for the move, citing the need to reduce transaction costs for government payments and remittances. He noted that high transaction fees affect not only individuals but also overseas Filipino workers, who are often charged exorbitant fees for sending money home.
UMVA has gathered that the government aims to bring down transaction costs to a level that reflects only the minimal charges imposed by clearing switch operators. This move is expected to promote digital payments, financial inclusion, and innovation, while ensuring adequate regulatory oversight and consumer protection mechanisms.
Land Bank of the Philippines has already taken steps to reduce transaction costs by cutting transfer fees and temporarily waiving convenience fees for eligible person-to-government transactions. The bank may indefinitely extend the waived convenience fees for government transactions if it makes financial sense.
