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April 12, 2024

BSP wants big banks to sustain free online transfers for small transactions

The largest banks in the Philippines are engaged in discussions with the Bangko Sentral ng Pilipinas (BSP) to ensure the viability of maintaining fee-free online transactions for amounts totaling P1,000 or less.

BSP Deputy Governor Mamerto E. Tangonan noted the increased focus over the past year on finding solutions to mitigate potential losses associated with providing complimentary services for small-value online transactions.

Tangonan mentioned ongoing efforts to address concerns surrounding the financial implications for banks and non-bank entities alike, acknowledging the necessity of recouping operational costs while offering incentives to maintain a balance that benefits all stakeholders.

Major banks, particularly universal and commercial ones, have been offering complimentary online transfer services for transactions under P1,000 for a limited duration, with the possibility of renewal based on individual bank policies.

BDO Unibank Inc. president and CEO Nestor Tan, however, highlighted the need for thorough review of proposals suggested by BSP, indicating uncertainty regarding the feasibility of a permanent waiver on fees for small online transactions.

UnionBank president and CEO Edwin R. Bautista expressed openness to the idea of indefinitely waiving fees for small-value online transactions, contingent upon ongoing negotiations with BSP and industry stakeholders.

Despite potential challenges, Bautista underscored UnionBank’s commitment to supporting emerging entrepreneurs, particularly micro, small, and medium enterprises (MSMEs), viewing fee waivers as an investment in future growth.

While some banks, such as Metropolitan Bank and Trust Co. (Metrobank), have experimented with zero rates for online transfers under P1,000, their permanence remains under consideration, as indicated by Metrobank president and CEO Fabian S. Dee.

Rizal Commercial Banking Corp. (RCBC) president and CEO Eugene S. Acevedo noted the importance of exploring alternative strategies beyond zero rates to incentivize increased usage of online transactions, including bundling services and integrating transactions into a broader banking ecosystem.

BSP Governor Eli M. Remolona Jr. reiterated the central bank’s push for a more systematic and permanent adoption of zero rates for small-value online transactions, aligning with BSP’s objective of transitioning 50 percent of all payment transactions to electronic forms.

The BSP’s announcement to maintain a cap on interbank money transfer fees and discourage fee increases until all banks and non-banks implement zero rates reflects its commitment to promoting digital payments and fostering financial inclusivity.

As of December 2022, digital payment transactions accounted for 42.1 percent of all payments, indicating progress towards BSP’s goal, with further enhancements expected through collaborative efforts between regulatory authorities and industry stakeholders.

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