The Bangko Sentral ng Pilipinas (BSP) is proposing the adoption of a free-of-charge strategic payment use cases such as the national QR code standard and QR Ph for the transportation sector, among other crucial sectors.
In a draft circular currently being circulated among the banking and payments industry players, the BSP wants to implement payment use cases to be serviced by payment service providers (PSPs) “without fees, including interbank charges, or free of charge to end-users.”
End-users in this case are consumers and merchants. PSPs are entities that provides payment services to end-users that also includes billers and government institutions.
The rationale for this, according to the proposed circular, is that PSPs play “a crucial role in facilitating the movement of funds and enabling financial transactions within the economy” and therefore making it free-of-charge will “support national development objectives, foster financial inclusion, stimulate economic activity, and align with regulatory goals for a safe, efficient, reliable and secure payment ecosystem.”
The BSP is strongly urging the “active participation of PSPs in strategic payment use-cases” and in the use of QR code. The QR technology is one of the "most expedient means of making payments" because it only needs the use of smartphones or tablets to scan QR codes to make payments.
The draft circular has a feedback deadline of Aug. 16. The BSP wants all suggestions from the payments sector in by that time.
Presently, along with the draft circular, the BSP is reviewing the features of a strategic payment use case. It defines “use case” as “how users interact with and employ systems, methods, or processes to achieve a specific goal.”
As for payment use case, this is a use case for a payment service such as person-to-merchant (P2M) payment or a business-to-government (B2G) payment use case.
The BSP, meanwhile, describes a strategic payment use case as payments included in the provision of Republic Act No. 11127 or the National Payment Systems Act.
The BSP will consider a payment use case strategic when it supports the objectives of the national development plans and strategies. This is especially true of use cases that have a “particular focus on enhancing financial inclusion and modernizing key sectors of the national economy, which ultimately foster sustainable economic growth of the country.”
The BSP said that in identifying strategic payment use cases, it will also consider its impact, accessibility, and inclusivity.
Specifically, the BSP will review its impact on economic growth, social development, or public welfare, contributing to broader societal goals and priorities; its accessibility as an essential resource, good, or service, wherein digitalization ensures enhanced access to such resources, goods, or services, by making these more convenient and available to a wider range of individuals or communities; and inclusivity if it addresses the needs of diverse populations, including those in remote or underserved areas, and ensuring equitable access to benefits.
One of the key features of a strategic payment use case is that it will be offered to end-users without fees, including interbank charges, or free of charge, said the BSP.
“The Bangko Sentral will continuously explore offering incentives on a case-by-case basis, depending on the level of participation by the PSP in this initiative. These incentives may include, but shall not be limited to, waiver of or reduced supervisory and operational fees, public recognition, and publicity,” it said in the draft circular.
It added though that while “participation in the strategic payment use case is not mandatory, PSPs are encouraged to align and participate with the collective societal efforts towards the attainment of the national development objectives, the substantial enhancement of financial inclusion, and the continuous stimulation of economic activity, while remaining consistent with the BSP’s objectives of a safe, efficient, reliable, and secure payment systems.”