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.