BSP terminates PhilPaSS Remit

Banks are expected to cut the fees they charge on their remittance services after the Bangko Sentral ng Pilipinas (BSP) phased out its very own PhilPaSS Remit in favor of the “faster and cheaper” PESONet and InstaPay run by payment industry players.

BSP Governor Nestor A. Espenilla Jr. said the two automated clearing house (ACH) PESONet and InstaPay – both established under its National Retail Payment System (NRPS) – has replaced the PhilPaSS Remit which BSP created in 2010 as an electronic settlements and payments facility for overseas Filipino remittances.

Espenilla said they have deactivated the system last month because clearing retail transactions is not part of the BSP job.

Under the NRPS, he said the central bank is limited to settlement functions. “We settle cleared transactions (and these are) cleared by the ACHs.”

PhilPass Remit has a standard fee of 15 which the BSP collected from the remitting or sending bank while back-end fees of 150 were charged by the bank per transaction.

A sending bank participating in the two ACHs, in the meantime, is charging 110 per transaction, according to Espenilla. InstaPay is more retail while PESONet is large value transactions.

With a 24/7 InstaPay for example, everyone can transfer funds or make payments of up to 150,000 per transaction a day but there is no limit to the number of transactions in a day. Both sender and recipients will be charged fees.

Espenilla said InstaPay will attract “more players and (it’s) more inclusive” as well as cheaper. “Remember (PhilPaSS Remit) was created in the absence of (a facility) before. They went to the BSP to create something to address an immediate problem (at the time) but things have moved on… there’s a better way of doing it.”

Espenilla said they terminated PhilPass Remit for an “improved availability” of electronic retail payments in real-time that are “safe and affordable” and “a better approach for the public”.

BSP Deputy Governor Chuchi G. Fonacier said PESONet which was launched earlier than InstaPay, can handle the transactions of PhilPass Remit since it could serve large values.

Fonacier said PESONet, for some, is the preferred ACH to replace PhilPass Remit although both ACHs are capable of large transactions. PESONet transactions have no limit while InstaPay since it is retail, has a maximum limit of 150,000 per transaction.