In its bid to accelerate the digitalization of payments in the country, the Bangko Sentral ng Pilipinas (BSP) has recently given banks and financial institutions up to June 30 this year to adopt the QR Ph program or the national quick response (QR) code standard.
Based on a memorandum signed last February 23 by Mamerto E. Tangonan, Deputy Governor of the BSP, the Philippine central bank will now require all BSP-supervised Financial Institutions (BSFIs) and payment service providers (PSP) to fully adopt the QR Ph program.
“All PSPs deploying non-QR Ph codes, which are also referred to as proprietary QR codes, for payment services shall be allowed to transition to the QR Ph until 30 June 2023,” the BSP memorandum said.
“But beginning 01 July 2023, all proprietary QR codes for payments services shall be disabled and shall no longer be available to the public,” it added. The memorandum further stated that internet platforms and mobile apps of PSPs will no longer support the scanning of non-QR Ph codes.
According to the BSP, payment service providers on the receiving end should disable any transactions via non-QR Ph codes. Appropriate notification should likewise be used to inform payors of any unsuccessful transfer.
QR PH is one of the programs of the government that aims to increase the share of digital payments in the country.
QR Ph meant to foster payment system efficiency
In November 2019, the BSP and the Philippine Payments Management, Inc. (PPMI) launched QR Ph, which is used for digital person-to-person (P2P) transfers and person-to-merchant (P2M) payments through the InstaPay rail.
This initiative is just one of the first sets of initiatives that the BSP and the payments industry are working on to support the roadmap of shifting from a cash-heavy to a cash-light economy — an idea derived from the recognition that digital payments are the gateway to financial inclusion in the Philippines.
Under BSP Circular No. 1055, the BSP requires all participating payment service providers, including banks and non-bank electronic money issuers (EMIs), to adopt QR Ph.
The primary rationale for the adoption of a national standard is to foster payment system efficiency by transforming the fragmented QR-driven payment services in the country into interoperable payment solutions.
This approach, according to the BSP, is expected to substantially minimize the need for merchants and customers to maintain their accounts with the same payment service providers and for billers to display numerous QR codes to accept payments from customers who may be using other banks or EMIs.
The payment program works by unifying the various domestic cashless payment schemes that make use of the QR code as a form factor and is able to provide for safer transactions since it is very much aligned with the Europay-Mastercard VISA Co (EMVCo) standard, the global standard for secure payments.
As such, QR Ph can thus allow for a quick, low-cost and safer method of paying, transferring and receiving funds from other bank and e-money accounts in the Philippines.