The Bangko Sentral ng Pilipinas (BSP) has circulated its proposed rules on the basic merchant account (BMA) framework that will allow ambulant vendors and convenient stores to digitally transact payments and open accounts.

BMAs, which are accounts that enable micro, small and medium enterprises (MSMEs) to accept digital person-to-merchant and business-to-business payments, will be offered by all banks, bank-owned e-money issuers (EMI) and non-bank EMIs.

BMAs are specifically designed for ambulant vendors or street hawkers who travel – whether on foot or on tricycles or bicycles – to sell their goods. But it also includes gasoline stations and restaurants, among others.

The draft circular was released on Tuesday, Dec. 13. It has a feedback deadline of Dec. 29.

The proposed circular aims to expand the inclusive financial system and to “promote broad adoption of digital payment among consumers and businesses given its welfare-enhancing benefits for its users and the country.”

The BMAs will encourage the uptake of merchant accounts to enable seamless payments. It is designed for the small and micro merchants “who may have limited resources and capabilities to open a regular merchant account for their enterprise,” said the BSP.

Based on the proposed rules, there will be three tiers of BMA products for each predetermined target market.

The first tier or the “Tier Zero” are ambulant vendors, sari-sari store owners, small eateries, tricycle/pedicab drivers and operators. Tier 1 are mini groceries, market stall vendors, food cart vendors and bakeries. Tier 2 are convenience stores, pharmacies, gasoline stations and restaurants.

The BSP issued different Know Your Customer or KYC documentary requirements, monthly flow limit, minimum opening deposit account and minimum maintaining balance per tiers.

The BSP defines monthly flow limit as “the maximum amount of the sum of gross incoming transactions in the BMA within a reference month. Incoming transactions include person-to-merchant payments, deposits and fund transfers from any source. The inflow limit refreshes monthly and resets at every start of a month,” said the BSP.

For the banks’ BMA, the monthly flow limit for Tier Zero is up to P100,000 with a minimum deposit account of P100 and no maintaining balance. For Tier 1, the monthly flow limit is from P100,001 to P500,000 with a P500 minimum deposit account and a maintaining balance of not more than P1,000. For Tier 2, the montly flow limit is from P500,001 to P1 million with a minimim deposit of P3,000 and not more than P5,000 maintaining balance.

Interest rate is optional while the merchant discount rate will only apply for Tier 1 and Tier 2 of between zero and less than one percent for QR Ph transactions, subject to recalibration as determined by the BSP’s Monetary Board.

The digital payment feature is QR Ph payments, bills payments, and other fund transfers under P2M and B2B transactions.

The BSP said banks with BMA products will have regulatory incentives. Banks with BMA e-money accounts of at least 5,000 to 100,000 will have a 10 percent or P10 million whichever is lower discount on their annual supervisory fees. If they have more than 100,000, the discount is 25 percent or P15 million whichever is lower.

There will be different guidelines for EMI-banks and non-bank EMIs but the monthly flow limit is the same. For Tier Zero it is up to P100,000 for all EMIs. For Tier 1 it is also P500,000 monthly flow limit while it remains at P1 million for Tier 2.

The new BSP product is tailored fit for the micro and small merchants’ requirements to start accepting digital payments. One of the significant features of these accounts is that it will remove transaction fees that are being paid by customers.

When the basic merchant account is implemented, the BSP is hoping that merchants will be encouraged to use this. The BSP has simplified documentary requirements and make them as minimal as possible.

While some vendors and market stall owners are already using QR code payments, most of these accounts are under the merchants’ personal accounts.