BSP pushes Asean cross-border payments

The Bangko Sentral ng Pilipinas (BSP) continues to push for multilateral crossborder payments connectivity in the region as countries recover from the impact of the pandemic.

BSP Governor Felipe Medalla highlighted the importance of increasing public investment on IT infrastructure and involving private players in making the goal of multilateral cross-border payments connectivity a reality.

“In an island economy with nearly everyone having a cell phone, public investment in satellite communications may enable access to financial services almost universal. The government may work with the private sector to maximize the potential of and speed up access to e-money and phone-based banking services,” Medalla said.

The BSP chief virtually joined other ASEAN-5 central bank governors in a session on “Faster, Cheaper, More Transparent and More Inclusive Cross-Border Payment to Promote Regional Economic Recovery” during the Indonesia Digital Economy and Finance Festival (FEKDI) 2022 held last week.

In establishing interoperability of cross-border payments, Medalla said central banks should address not only the technical issue of aligning the features of different payment systems, but also the non-technical challenges such as those relating to regulatory, supervisory and oversight frameworks as well as anti-money laundering and data privacy related policies.

According to Medalla, the BSP is working with the Monetary Authority of Singapore and Bank Negara Malaysia in establishing bilateral linkages between the Philippines’ InstaPay with Singapore’s PayNow and Malaysia’s DuitNow.

During the virtual session, other central bank governors also shared their visions for the future of cross-border payments in the region, key aspects of establishing interoperability opportunities for ASEAN as well as prospects for collaboration among authorities and market players.

Under its Digital Payments Transformation Roadmap, the BSP aims to convert 50 percent of total retail transactions in terms of volume to electronic channels and increase the number of Filipino adults with bank accounts to 70 percent by 2023.

The twin goals are within reach as the share of digital payments to total retail transactions increased to 30.3 percent in terms of volume in 2021 from 20.1 percent in 2020, while the number of banked Filipino adults jumped to 53 percent from 29 percent.