Senatorial aspirant and Sorsogon Governor Francis ‘’Chiz’’ Escudero on Friday, January 7 said the Bangko Sentral ng Pilipinas (BSP) should consider standardizing fees for online transactions designed to propel the Philippines towards a cash-lite economy.
Escudero, the former chairman of the Senate Banks, Financial Institutions and Currencies committee, said the BSP’s target of converting 50 percent of the volume of all retail payments to digital payments by 2023 would not be possible if online transactions are not made affordable and accessible to all Filipinos.
“Digitization should not come at the cost of financial inclusion. As it is, the digital divide isolates certain segments of our population from a digital economy. Those who do have online access should not have to pay more for convenience,” Escudero said.
“If the BSP cannot eliminate transaction fees, then it should at least ensure that banks, e-wallets and other financial institutions using online platforms collect a minimal and standardized fee that will not discourage people from being part of the digital ecosystem,” he said.
Some banks charge P25 per online transaction while e-wallets charge at least P15, regardless of the amount involved. In November 2021, the BSP reported nearly 43 million InstaPay transactions worth P270.2 billion, earning banks over a billion in transaction fees.
In its State of Digital Payments in the Philippines report, the BSP noted that consumer payments accounted for the biggest percentage (78 percent) of the 4.6 billion monthly payments done in 2019, followed by corporate payments (21 percent), and government payments (one percent).
By 2020, 20.1 percent of the volume of all monthly payments were done online, driven by health protocols that prevented people from transacting face-to-face. The volume represented a 26.8 percent increase in terms of value from 2019 figures.
“A digital and cash-lite economy must include and prioritize traditionally underserved or unbanked groups, such as sellers in the informal sector, lower income households, and micro and small enterprises, but if we charge them fees that continually increase, how will they benefit, given the little that they earn?” Escudero said.
He urged the Monetary Board of the BSP, which recently extended a moratorium on fee hikes for InstaPay and PESONet transactions, to review the current fees imposed by banks, e-wallets and other financial companies on digital transactions, and to come up with a uniform set of fees that will be reasonable for all users
“The COVID-19 pandemic has shown us that digital is the way to go, but to be sustainable, a digital economy must serve all sectors,” he added.