BSP to launch electronic fund transfer next month

The Bangko Sentral ng Pilipinas (BSP) is set to launch the electronic fund transfer credit next month as it moves toward a unified e-payments platform in the country.

BSP Governor Nestor Espenilla Jr. said the batch electronic fund transfer credit to be called PESO Net would be launched next month followed by the real time low value push automated clearing house or “InstaPay’ as part of the National Retail Payment System (NRPS).

“Finally, the BSP is currently working with the industry toward enabling more Filipinos to have access to a transaction account to send and receive payments via any electronic device through the NRPS,” he said.

Espenilla said banks, through the Bankers Association of the Philippines (BAP) have already estab- lished the Philippine Payments Management Inc. (PPMI) to act as a supporting body of the BSP by monitoring proper implementation and progress of the NRPS.

The NRPS and the payment ecosystem that is envisioned to arise from it is positioned to be a platform for fintech innovations and could dramatically lower the cost of doing business for micro, small, and medium enterprises (MSMEs) as well as enable more e-commerce.

“Our MSMEs will surely benefit from these initiatives by broadening their customer reach, reducing the cost of managing cash, and providing greater access to credit,” Espenilla said.

MSMEs comprise 99.5 percent of all registered business firms nationwide and contribute the largest share of total jobs generated at 61.6 percent. However, MSMEs account for only 35.7 percent of the country’s gross domestic product.

MSMEs are unable to reach their full potential due to a range of barriers, including financial access, characteristic of MSMEs even in other countries.

Lending to MSMEs comprises only 6.1 percent of total loan portfolio of banks.

The NRPS framework launched in December 2015 is the flagship program of the BSP to modernize the country’s payment system as it aims to create a safe, efficient, and reliable retail payment system in the Philippines.

Digitizing retail payments is critical in the Philippines considering that 99 percent of payment transactions per month are done in cash, with businesses and individuals making only one percent and 0.3 percent electronic payments, respectively, according to a study done by the Better Than Cash Alliance.