The Bangko Sentral ng Pilipinas (BSP) will soon issue a pricing standard for the real time, interbank money transfer services InstaPay and PESONet which will likely result to lower fees.
Currently, the BSP is imposing a moratorium against increasing fund transfer fees and banned banks and non-banks running both InstaPay and PESONet from adjusting rates for person-to-person fund transfers until the order is lifted.
“We’re studying the policies for the pricing guidelines (and) it is possible that the payment service providers will have to reevaluate the way that they price their PESONet and InstaPay fund transfer fees,” according to BSP deputy director Bridget Rose Mesina-Romero of the payment system oversight department during BSP’s virtual media information briefings on Friday, June 10.
When the pricing guidelines is released, the BSP will review the price freeze on InstaPay and PESONet. It is one of the conditions for the lifting of the moratorium, either issue a pricing standard or the volume of digital payments have reached 40 percent of the total retail payments in the country, whichever is earlier.
Mesina-Romero said that as a result of the BSP evaluation, both banks and non-banks with InstaPay and PESONet “may have to reduce” their fees. “But as of the moment, it’s not definite yet,” she added.
Mesina-Romero told reporters that BSP is developing pricing guidelines to “take a look and study the pricing structures and pricing practices of the payment service providers.”
It was in January this year when the BSP implemented the price freeze on InstaPay and PESONet. Basically, the BSP ordered banks and non-banks to keep current charges until 40 percent of all retail payments have migrated into digital or e-payments. As of end-2020, about 20.1 percent of transactions are already in digital form.
As of end-April, InstaPay fees go from P8 to P25 versus end-December 2021 fees of P5 to a high of P30 per transaction, while some offer free of service. The moratorium was issued on December 28, 2021.
Aboitiz-led Union Bank of the Philippines charge the highest at P30 for specific transactions, while Asia United Bank Corp. and fintech company, Zybi Tech Inc. charge the cheapest at P8 per transaction.
As for PESONet, which handles a higher volume of transfers or P50,000 and up, the minimum fee is P8 up to P2,100. Foreign banks may charge in US dollars. There are banks however, that offer free PESONet service for some transactions at the moment, but only until the end of this month or by end-July this year.
There are 94 BSP supervised financial institutions participating in PESONet and 66 in InstaPay as of end-April this year.
Last year, PESONet volume grew by 26 percent year-on-year to seven million transactions while the peso value also increased by 37 percent year-on-year to P502 billion.
InstaPay transactions in 2021 also rose by 47 percent year-on-year to 45 million while peso value also went up by 64 percent year-on-year to P289 billion in 2021.
The increased usage of digital payments was largely driven by high-frequency, low value retail transactions such as person-to-merchant or P2M payments and person-to-person or P2P payments such as electronic fund transfers.
Based on BSP data, in the past four quarters, the combined transactions of InstaPay and PESONet have an average quarterly growth rate of eight percent in terms of volume and 10 percent in terms of value.