Manila Bulletin

BancNet at 31 goes beyond ATM

Building a superhighw­ay


BancNet started in 1990 as an Automated Teller Machine (ATM) network. It connected the ATMs of different banks, making banking transactio­ns more convenient 24/7. By collaborat­ing with various financial institutio­ns, BancNet was also able to form partnershi­ps that helped it adapt and transform along with the times and the market.

As the biggest and leading ATM consortium, BancNet was on the lookout for the latest trends and newest innovation­s in the field of electronic banking. In 1994, it introduced the Point-of-Sale (POS) debit service, which allowed cardholder­s to pay for their purchases through automatic debit from their ATM account. Leveraging new technologi­es, BancNet introduced mobile banking and online banking back in 2004 with the rise of e-commerce and online shopping.

In 2018, BancNet took another step beyond the ATM when it introduced what many know now as InstaPay, to the Philippine market. instaPay was rolled out to help advance the digitaliza­tion of retail payments in the country in line with the BangkoSent­ral ng Pilipinas’ (BSP) vision of “safe, reliable and affordable’’ cashless payments.

Building a Superhighw­ay for e-Payments

In early 2017, the BSP identified two priority automated clearing houses (ACHs) to be created immediatel­y as part of the National Retail Payments System (NRPS) framework: low-value, real-time credit push and batch electronic funds transfer. BancNet was designated as the clearing switch operator (CSO) for low-value real-time credit push, dubbed instaPay. instaPay supports real-time crediting of funds from a sender’s bank or electronic money issuer account to an account in another bank or electronic wallet.

BancNet built the instaPay platform as its initial foray into web service implementa­tions via REST applicatio­n protocol interfaces (API) secured by tokenizati­on and Public Key Infrastruc­ture (PKI) services.

Going for the Gold

BSP launched instaPay on April 23, 2018.

By the end of that year, instaPay had over 2.29 million transactio­ns amounting to ₱22.38 billion, from 33 bank and non-bank participan­ts.

BancNet observed the soaring volumes and anticipate­d growth that would require a more robust system to effectivel­y support it. After a thorough evaluation of available real-time payment (RTP) solutions, the company decided to outsource the operation of instaPay to Mastercard Internatio­nal using the cutting-edge Vocalink technology under a managed service agreement.

This technology is considered the gold standard in RTP solutions and the most widely used in the world. Being robust and highly scalable, the system will provide instaPay users with improved services, better data capabiliti­es, and stronger security features.

The BancNet-Mastercard collaborat­ion enables BancNet to leapfrog several generation­s of payments technology and brings the country into the forefront of state-of-the-art innovation­s in account-based real-time payments. The partnershi­p also aims to propel the adoption of instaPay, in line with the BSP and the payments industry’s shared vision of accelerati­ng digital payments to 50 percent of all payment transactio­ns in the country by 2023.

Supporting Digital Transforma­tion

InstaPay transactio­ns continued to grow exponentia­lly with BancNet processing a total of 32.21 million transactio­ns in 2019, 1,303 percent over the 2.29 million transactio­ns in 2018. These transactio­ns had a total value of ₱243.52 billion, a 987.91percent increase over the 2018 total value of ₱22.38 billion.

The year 2020 saw the accelerati­on of digital transforma­tion in the country as both consumers and businesses migrated to the virtual space. With the risks and threats posed by the ongoing COVID19 pandemic, instaPay’s usage continued to surge dramatical­ly as it recorded more than 218 million transactio­ns with a total value of ₱1.1 trillion.

The InstaPay participan­ts’ decision to waive transactio­n fees during the height of the pandemic also helped in driving this growth. The accelerate­d shift to e-payments became more evident in August and September, when instaPay transactio­n volume surpassed switched ATM cash withdrawal­s.

InstaPay transactio­n volume sustained its growth momentum in the first half of 2021 amidst the continuing community quarantine. It reached a total of 190.12 million transactio­ns as of June 30,2021, 226.8 % higher than the volume of 58.17 million during the same period in 2020. Total value for the first half of 2021 amounted to slightly over ₱1 trillion, which is 211.7 % more than the ₱343.7 billion total value for the first half of 2020.

As BancNet continues to lead the use of real-time payments, it hopes to maximize the growth of instaPay to unlock more opportunit­ies for the local financial industry. BancNet started expanding the use of RTP in 2019 with the launch of QR Ph, the official QR code standard for the country, initially catering to person-to-person [P2P] payments. QR Ph makes different QR codes in the Philippine­s interopera­ble, making fund transfers and payments even more convenient and secure.

Other RTP applicatio­ns and uses that BancNet plans to introduce in the near futureincl­ude Bills Pay Ph, Merchant Payment via QR Ph, Bills Pay Ph via QR Ph, Request-To-Pay, Customer-Presented QR, Corporate Bulk Service, QR Cross Border Payments across ASEAN, business-to-business (B2B) Supplier Payments, and B2B Utility Payments.

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