The Bangko Sentral ng Pilipinas (BSP) recently commended the efforts of students who came up with the idea for “Paleng-QR PH,” its joint program with the Department of the Interior and Local Government (DILG) that promotes the use of QR (quick response) code based on Europay-Mastercard-VISA (EMV) standards.
Launched recently in one of the public markets in Baguio City, the “Paleng-QR PH” program encourages vendors, shopkeepers, and public utility vehicle drivers to transact with their customers and passengers using digital payment platforms such as Globe’s GCash or Smart’s Maya.
In a press release, the BSP shared that the initiative stemmed from the “BSP Youth Summit 2021”, which included a policy competition for advancing the central bank’s Digital Payments Transformation Roadmap. It also noted that they have long considered the youth as strategic partners in promoting digitalization and financial inclusion throughout the country.
Commending the ‘brains’ behind the QR project
The BSP adopted the concept for Paleng-QR Ph after listening to the presentation of a team of students from the University of the Philippines-Los Baños (UPLB) composed of Reymar Angelo Cabatu, Harper de Leon, Martin Rafael Torres, Oliver Caile Montesar, and Paolo Nicomedes. Their adviser is Joram Obsioma.
“Our team conceived of a mobile application called e-Palengke to enable selling and buying of goods online,” recalled Torres. The concept was aimed at helping Filipinos face the challenges of the COVID-19 pandemic while promoting financial digitalization.
“By helping palengkes go digital, we not only help market vendors protect themselves against COVID-19, but also to cope with the fast-changing financial environment — ‘yung hindi sila mapag-iiwanan ng mga malls and techie businesses,” Obsioma explained.
The UPLB students spent about three months developing the concept paper for the e-Palengke mobile app. In their third month of research, they encountered QR Ph, and this served as a “eureka” or “I found it!” moment for the group.
The team’s policy paper, “Paleng-QR PH: Breaking the Barriers to Digital Payment Systems Starting from Local Markets,” eventually landed on the list of finalists for the BSP Youth Summit 2021.
According to the students, consumers and merchants will enjoy faster and more convenient transactions using QR PH as the technology minimizes errors associated with the manual encoding of account details.
It also does away with the need for retailers to stock up on “loose change” since exact amounts can be paid. Moreover, the technology is affordable, and merchants no longer need to purchase expensive point of sale (POS) or data capture machines to process payments.
The Paleng-QR PH program explained
Jointly developed by the Bangko Sentral ng Pilipinas (BSP) and the Department of the Interior and Local Government (DILG), the “Paleng-QR PH” program aims to build the digital payments ecosystem in the country by promoting cashless payments in public markets and local transportation, particularly tricycles.
Capitalizing on the QR Ph initiative, the program seeks “championships” for the policy and enjoins local government units to push for the acceptance of digital payments among market vendors, community shopkeepers, tricycle operators as well as jeepney drivers in all cities and municipalities in the country.
The Paleng-QR Ph program highlights the significance of market purchases and local transportation fares as basic components of an average Filipino’s typical payment pattern. Until a market vendor and tricycle driver can accept digital payments, transitioning to cashless transactions would be difficult for an average Filipino consumer.
The key components of the program are as follows:
- Policy issuance(s) of the LGUs to incentivize or mandate the use of QR Ph digital payment by market vendors, tricycles, and other such merchants.
- Provision of assistance by the LGU in the onboarding of market vendors and tricycle drivers to a QR Ph-ready transaction account, in coordination with any or all financial service providers (FSPs) that already have QR Ph capabilities.
- Conduct of a financial literacy program by LGUs, in coordination with the BSP, the DILG, and other participating FSPs, on key topics such as effective use of digital payments in business; financial services for micro and small enterprises; and financial consumer protection.
The program was first introduced in the country after the DILG and the BSP signed a joint memorandum circular last June 21, 2022, enjoining LGUs to implement the Paleng-QR Ph program.