BSP holds off hike in InstaPay, PESONet transfer fees

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has imposed a moratorium on the planned fee increases for electronic fund transfers by banks and other financial institutions until the share of digital payments to total transactions doubles to 40 percent.

BSP Governor Benjamin Diokno said the Monetary Board approved the moratorium on the increase in transfer fees for InstaPay and PESONet transactions last Dec. 23.

“The said moratorium is expected to not only help the economy but also sustain the momentum in the use of digital payments,” Diokno said.

Under its Digital Payments Transformation Roadmap, the central bank aims to shift half of total retail transactions to electronic channels by 2023 as part of its commitment to transform the Philippines into a cash-light from a cash-heavy economy.

With the pandemic serving as catalyst, the share of digital payments to total retail transactions jumped to 20.1 percent in 2020 from only 14 percent in 2019 and a mere one percent in 2013.

This slightly exceeded the 20 percent target set under the National Retail Payment System (NRPS) launched in December 2015 that gave birth to electronic fund transfers via the InstaPay and PESONet platforms.

Diokno said the BSP would review the lifting of the moratorium upon issuance of pricing guidelines or once the volume of digital payments reaches 40 percent of total retail payments in the country, whichever is earlier.

The imposition of the moratorium is pursuant to Republic Act 11127 or the National Payment Systems Act. The NPSA provides a comprehensive legal and regulatory framework to support the twin objectives of maintaining a payment system that is necessary to control systemic risk, and providing an environment conducive to the sustainable growth of the economy.

“Accordingly, PESONet and InstaPay participants are directed, from date of this memorandum, to maintain the transfer fees for person-to-person fund transfers,” Diokno said.

Over the past few weeks, some banks and financial institutions raised the fees charged for electronic fund transfers via the InstaPay and PESONet that were waived during the height of the COVID-19 pandemic.

Diokno said BSP-supervised financial institutions are mandated to disclose their fees, including the waiver and reduction.

According to the BSP chief, the relevant transfer fee that is currently waived may only be restored up to the amount of fee reported to the central bank prior to the waiver.

He added that BSFI participants that do not currently impose transfer fees need to submit any fee to be imposed on its customers for InstaPay and PESONet transactions for prior BSP approval.

Likewise, banks and financial institutions not charging InstaPay and PESONet fees also need to report to the BSP’s Payment System Oversight Department 60 days prior to the date of the planned implementation.

The regulator has tasked the Philippine Payments Management Inc. to monitor the compliance of member entities and report to the central bank any non-compliance within the next banking day from the date of notice.

As of Dec. 17, banks and institutions that offer free InstaPay fees until Dec. 31 include ING Bank, Asia United Bank, China Bank, China Savings Bank, EastWest Rural Bank, Camalig Bank, Equicom Savings Bank, Malaysian Savings Bank, Robinsons Bank, Rizal Commercial Banking Corp., via Diskartech mobile app, and Rural Bank of Guinobatan. GrabPay has waived InstaPay fees until March 31 next year.

On the other hand, 20 banks and financial institutions continue to offer free PESONet fees until the end of 2021.