BSP EYEING TO REMOVE FEE FOR ELECTRONIC FUND TRANSFERS

The Bangko Sentral ng Pilipinas (BSP) wants banks and other financial firms under its supervision to remove the transaction fee on electronic fund transfers and payments to small businesses.

BSP eyes to remove incurred fees from person-to-person electronic fund transfers and micro-merchant payments (Photo courtesy of Yugatech)

The central bank is eyeing to amend the Manual of Regulations for Payment Systems (MORPS) to “provide for the elimination of fees on electronic fund transfers for personal transactions, up to a specified threshold on the number of transactions, and on payments for micro-merchants.”

But the circular stated that it is only for personal transactions and payments to micro, small and medium enterprises (MSMEs) as it doubles down on its efforts to transform the country into a cash-lite economy.

BSP Governor Eli M. Remolona, Jr. earlier said the regulator has been employing moral suasion to influence the banking industry to permanently remove charges for small-value person-to-person online transactions.

According to BSP, it is a part of its broader efforts to encourage Filipinos to adopt digital payment methods and reduce reliance on cash. If approved, the waived fees will apply to personal transactions that fall within the “threshold” set by the BSP.

And would take effect on April 1, 2025. Financial institutions under the BSP’s supervision are given until October 11th to submit their comments. It also proposes to waive fees for small businesses with monthly aggregate gross receipts not exceeding Php250,000.

The proposed circular defines personal transactions as fund transfers “involving persons, which can either be a remittance or lending of funds, done for personal, family, or household purposes and not conducted in the ordinary course of business.”

“Accordingly, person-to-person electronic fund transfers shall be offered free of charge for personal transactions; provided, that transactions beyond the threshold set in the definition are still allowed subject to fees,” the BSP added.

Before the health crisis struck in 2019, the proportion of digital payments in the country was only at 14 percent. Pandemic lockdowns that kept Filipinos at their homes for months and spurred the need for contactless transactions accelerated the shift to digital payments.

Source: Philippine Daily Inquirer

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