MANILA, Philippines — The Bangko Sentral ng Pilipinas is considering a fixed subscription fee model for digital transactions as an alternative to the current per-transaction fee structure, according to BSP Governor Eli Remolona Jr.
Amid discussions with banks and financial institutions on reducing or eliminating fees for electronic fund transfers, Remolona said the current fee-per-transaction model is fundamentally “the wrong model.”
“Because of what we call network externalities, there should be a subscription fee, which is fixed rather than a fee per transaction. So we’re still trying to figure out how exactly to do that,” Remolona said.
The proposed model aims to address complaints from banks and concerns about fairness while encouraging more widespread use of digital payments.
Since early 2023, the BSP has been urging banks and financial institutions to reduce or eliminate fund transfer fees.
According to Remolona, the BSP is still evaluating the feasibility of offering zero fees for personal bank-to-e-wallet transfers up to a certain threshold. But the threshold has yet to be determined.
“No fees between up to a certain threshold. We haven’t determined the threshold. The banks complained that if you do that, the guys who are above the threshold will just divide their transaction so that they fall within the threshold,” he said.
The central bank is actively consulting with key stakeholders, including e-wallet operators and financial institutions, to finalize a structure that benefits consumers while remaining viable for providers.
“We’re talking to GCash, we’re talking to Maya and all the participants. We’re going to agree on something,” Remolona said.
The proposed subscription fee model could mark a significant shift in how digital transactions are priced in the Philippines, potentially boosting the adoption of cashless payments while ensuring a fair and sustainable system for all stakeholders.
Latest data from the central bank showed that the value of electronic fund transfers coursed through the PESONet and InstaPay jumped by 35 percent to P15.62 trillion as of end-November 2024 from P11.56 trillion in the same period a year ago.
Combined volume of transactions done via InstaPay and PESONet surged by 62 percent to 1.34 billion from 824.86 million a year prior.
The central bank wants online payments to make up 60 to 70 percent of the country’s total retail transaction volume by 2028, in line with the Philippine Development Plan.