Pinoys go digital

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) recorded a sharp drop in ATM transactions as more Filipinos embraced online and digital transactions amid the extended enhanced community quarantine to slow the spread of the   coronavirus disease 2019 or COVID-19.

Vicente de Villa III, managing director of the BSP’s Financial Technology Sub-Sector (FTSS), said there was a sharp decline in the utilization of ATMs since the start of the enhanced community quarantine in Luzon.

De Villa said the number of ATM transactions fell by 25 percent, translating to a 30 percent drop in  value during the lockdown.

The central bank has urged banks and other financial institutions to promote digital channels and even waive the transaction fees for fund transfers via the PESONet and InstaPay.

“If we move forward and encourage banks to promote digital forms of transacting, the market will actually correct its own and these fees in ATMs will probably dwindle when digital payments rise,” de Villa said.

The BSP, through Memorandum   661 issued in April 2018, approved the lifting of the moratorium on ATM fees that ranged from P11 to P15 per transaction. However, the BSP, through Memorandum   2019-020, reminded banks to adhere to the principles of reasonable and market-based pricing in setting their ATM fees.

BSP Governor Benjamin Diokno said half or 50 percent of payment transactions would shift from cash or checks to digital payments by 2023, especially with the surge in the use of InstaPay and PESONet during the  quarantine.

“We see the use of digital payments gaining momentum in the post-coronavirus environment as more financial institutions embrace digital transformation to provide more efficient and safer services, while consumers and institutions, including the government, continue enhancing access to digital payment facilities,” Diokno said.

Data showed the volume and value of InstaPay and PESONet increased by 18 percent in April from March versus the average growth of six percent for volume and five percent for value in the first quarter.

“I see this trend to continue until the enhanced community quarantine is lifted, perhaps even beyond, as long as the risk of COVID-19 persists. It will be the new normal,” Philippine Payments Management Inc. president Abraham Co said.

BancNet chief executive officer Aristeo Zafra said InstaPay transactions are secure.

“You can check and double check the details before you confirm your transaction. Your bank or e-wallet will send you a one-time code to authenticate your identification before finalizing your transaction after which it shall inform you immediately that your money transfer was successful,” Zafra added.

Lito Villanueva, chief digital innovation and inclusion officer at Yuchengco-led Rizal Commercial Banking Corp., said the   bank booked an 821 percent jump in online and mobile facilities during the   quarantine.

InstaPay transfers of RCBC also showed marked increase, surging  by 357 percent in the first four months and 183 percent during quarantine period.

“We predict that this aggressive increase in new accounts and transaction value and volume will persist through the COVID-19 crisis and beyond as more users enjoy the benefit of our digital services,” Villanueva said.

Data from the Better Than Cash Alliance (BTCA) showed the share of electronic payments has increase to 20 percent in 2018 from eight percent in 2013 in terms of value and to 10 percent from one percent in terms of volume, particularly with the launch of the National Retail Payment System (NRPS) by the BSP in December 2015.