By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) is planning to form three more automated clearing houses (ACHs) to speed up the shift to a cash-less, digital payment system in the next two years.
Carmelita R. Araneta, general manager of the Philippine Payments Management, Inc. (PPMI) during the recently-held BSP Payments and Settlements Office (PSO) conference, said they will work with the central bank for the creation of new ACHs such as card-based, check-based and electronic fund transfer or EFT debit.
In her status update report on the BSP’s National Retail Payment System (NRPS), Araneta listed the set up of new ACHs as priority, as well as the standardization of QR codes and the inclusion of government disbursements/collections in the NRPS.
BSP Governor Nestor A. Espenilla Jr. said the development of a national QR code will level the playing field and encourage participation of small players in the NRPS.
He said a standardized QR code will “prevent the proliferation of closed loop infrastructures and instead promote interoperability of systems, domestically and even regionally.” The BSP is leaving it up to PPMI to work on this but that they will come in if there are any issues.
Araneta, in her report, said there are crucial challenges in implementing NRPS and its rules particularly in standardization. “Establishing consensus among participants which include non-bank EMIs (electronic money issuers)” and in fostering a “change of mindset” are two challenges she named.
Technical capability and connectivity to the clearing switch operator and risk management and other anti-money laundering-related issues are also other key challenges faced by the industry, said Araneta.
At the moment, there are just two ACHs – PESONet and INSTAPAY – and both provide digital payment solutions.
As of July this year, there are 42 banks in PESONet. INSTAPAY is participated by 24 banks while three are non-bank EMIs for 27 total.
Araneta said that since November 2017, when PESONet was first operated, clearing volume has totaled more than 2.24 million valued at P349.745 billion. INSTAPAY, on the other hand, after its launch in April this year, had a volume end-July of 50,114 worth P646.1 million.
PPMI members as of July totaled 74, of which 41 are big banks, 17 are thrift banks, 11 rural banks and five EMIs. ACH signatories currently number at 57 for PESONet and 45 for INSTAPAY.
During the conference, Espenilla reiterated that NRPS’ ultimate goal is to increase retail electronic payment transactions from one to twenty percent by 2020.
The NRPS was adopted by the BSP last year after issuing Circular No. 980. This was followed by the establishment of the industry-led PPMI, a stand-alone self governance structure run by payment industry participants and recognized by the BSP as the Payment System Management Body.
The central bank and PPMI have agreed a shared responsibility in monitoring new or emerging trends in the retail payment industry and to notify each other of any relevant information that would warrant appropriate action from either party.