by Bhea Baarde, Correspondent
Albay Representative Joey Salceda, Chairperson of the House Committee on Ways and Means, is calling on the Bangko Sentral ng Pilipinas (BSP) to regulate banks’ high digital fund transfer fees. This, he said, is in consideration of the high inflation rate the country is experiencing right now.
In making the call, Salceda cited data from the latest “Summary of Corresponding Fees of BSP Supervised Financial Institutions (BSFIs),” wherein PESONet fees can reach up to P2,100 per transaction, and P550 for purely local ones. InstaPay, meanwhile, has since climbed up to P35.
PESONet is a digital fund transfer service that supports bulk and recurring transactions while InstaPay is a real-time low-value payment substitute for cash transactions. They are operated by the Philippine Clearing House Corporation and BancNet, Inc., respectively.
“We are experiencing elevated inflation. Key policy rates have gone up as a result. Meanwhile, very few banks, if any, have raised their interest rates on deposits, to at least transfer some of the benefits to savers. And yet, bank transfer fees remain high for several banks. If this is not avarice, I don’t know what is. The BSP should cut it,” Salceda said.
The economist legislator stated that regulation from the BSP will force big traditional banks to innovate and be more retail consumer-friendly like the new virtual banks.
“Look at the virtual banks. Very high depository interest rates of up to 6 percent. No traditional bank matches this. Very low to zero fees, even interbank. If virtual banks are capable of offering the most retail-friendly services at very low fees, I don’t see why our biggest banks can’t,” Salceda said.
“I’m not saying that they do that. I’m just saying keep the fees low and reasonable. It seems that the larger the bank, the larger the fees are as a share of the total net income. Not capping fees sends a very bad signal and incentive to large banks: that they can make money off the average wage earner without performing their crucial role as sources of capital for economic growth. All they need to do is keep raising the fees,” the congressman added.
Pricing guidelines for PESONet and InstaPay to be out soon
Last June, the BSP announced that they will be issuing a pricing standard for PESONet and InstaPay that could likely result in lower service charges.
“We are studying the policies for the pricing guidelines, (and) it is possible that the payment service providers will have to reevaluate the way they price their PESONet and InstaPay fund transfer fees,” said BSP deputy director Bridget Rose Mesina-Romero.
According to the BSP, the issuance of pricing guidelines is one of the conditions before the BSP can review and/or lift the current price freeze moratorium imposed on PESONet and InstaPay fees.
The moratorium was implemented in January this year after banks who waived their PESONet and InstaPay fees announced that they will be returning to charge again.
Under the moratorium, banks and e-money issuers (EMIs) are not allowed to increase their service charges using the digital system, but they can waive or at least keep it to their pre-pandemic level.
Meanwhile, the waiving of PESONet and InstaPay fees started way back in 2020 as the banking sector’s relief measure to help the general public in the midst of the COVID-19 pandemic, and to deepen the use of digital payments.
As of this writing, the BSP is still in the process of developing the pricing guidelines. They are now also studying the pricing structures and practices of the payment service providers.
Prominently Important Payment Systems
The BSP’s Monetary Board has designated PESONet and InstaPay as “Prominently Important Payment Systems” (PIPS) in accordance with the National Payment Systems Act (NPSA).
Under the Payment System Oversight Framework, PIPS is a payment system that may not trigger or transmit systemic risk but can have a major economic impact or can undermine the confidence of the public in the NPSA or in the circulation of money.
Although privately owned, the status of PESONet and InstaPay as PIPS authorizes the BSP to oversee these payment systems in order to protect the public and ensure the efficiency, safety, and reliability of the NPSA as well.
As an electronic fund transfer service, the two payment systems’ designation as PIPS is also expected to help boost digital transactions in the country and promote the BSP’s digital payment transformation roadmap.
“The designation of PESONet and InstaPay as PIPS is considered timely, as these payment systems will facilitate the launch of other use cases for digital transactions such as interoperable bills-payments and direct debits,” said BSP Governor Felipe Medalla.
“This will further promote consumer welfare as we continue making progress toward the BSP’s objective of reaching 50% digital payments by 2023,” the BSP chief added.