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May 30, 2024

PESONet and InstaPay transactions soar, signaling digital payment growth in the Philippines

Transactions coursed via PESONet and InstaPay continued to rise at end-August, data from the Bangko Sentral ng Pilipinas (BSP) showed. The total value of transactions done through the BSP’s automated clearing houses InstaPay and PESONet climbed by 30.5 percent to P8.13 trillion as of end-August from P6.23 trillion a year prior. In terms of volume, PESONet and InstaPay recorded 557 million transactions from January to August, 38.9 percent higher than the 401 million in the comparable year-ago period.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the sustained double-digit growth rates in InstaPay and PESONet transactions came amid the accelerated adoption of digital banking transactions. “The continued strong growth in digital commerce and other business transaction fundamentally toggled up the use of online banking transactions and payment systems such as InstaPay and PESONet,” he said.

Broken down, the value of transactions done via PESONet grew by 24.3 percent to P5.01 trillion in the first eight months of the year from P4.03 trillion in the same period in 2022. The volume of transactions coursed through the payment gateway stood at 60.2 million transactions in the period, increasing by 8.5 percent from the 55.5 million recorded the previous year. Meanwhile, the value of transactions done through InstaPay climbed by 41.2 percent year on year to P3.12 trillion at end-August from P2.21 trillion in the comparable year-ago period. The volume of InstaPay transactions grew by 43.6 percent to over 497 million transactions during the period from 346 million at end-August 2022.

PESONet and InstaPay are automated clearing houses launched under the central bank’s National Retail Payment System (NRPS). The NRPS was rolled out in December 2015 to promote a safe, efficient, affordable, inclusive and reliable retail payments system.

PESONet caters to high-value transactions and may be considered as an electronic alternative to the paper-based check system. It is operated by the Philippine Clearing House Corp.

On the other hand, InstaPay is a real-time, low value electronic fund transfer facility for transactions up to P50,000 and is most useful for remittances and e-commerce. It is handled by BancNet, Inc.

According to Mr. Ricafort, lower fees for small-value fund transfers will encourage more Filipinos to use the BSP’s automated clearing houses, which would further boost the adoption of digital payments. “Reduced fees such as for InstaPay transactions by some banks would further incentivize the acceleration of the adoption of both InstaPay and PESONet thereby would expedite the regulator’s digitalization targets for all banking and other financial transactions,” he said.

Earlier this month, Bankero and BSP Governor Eli M. Remolona, Jr. said the central bank is encouraging more banks to lower or remove fees for small-value electronic fund transfers.

Mr. Remolona also said the BSP is currently using moral suasion to persuade the Bankers Association of the Philippines (BAP) to remove or lower the transfer charges for small-value transactions.

Aside from the BAP, the central bank is also in discussions with digital GCash and Maya Bank to reduce fund transfer fees.

The increases in PESONet and InstaPay transactions are expected to help the BSP achieve its twin goals to have 50 percent of retail payments done digitally and 70 percent of adult Filipinos become part of the formal financial system by 2023.

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