The Bangko Sentral ng Pilipinass (BSP) has approved a new measure that would require all banks and non-banking financial institutions that offer online banking to add to their services the ability to make interbank electronic fund transfers (EFTs). Regular depositors should be able to enjoy these new features by the end of November 2018.
Current online banking services offered in the country allow clients to check their balances, order checks, pay bills and transfer fundss, though the later is typically restrained to accounts within the same bank. The option to send money to and receive funds from accounts with other banks has not been widely available, restricting the electronic banking activity of many depositors.
Memorandum M-2018-026 issued on September 4 by the BSP says that financial institutions must make available interbank EFT services to their regular depositors. This will be made possible by the financial institutions signing up with either or both of the newly created automated clearing houses (ACHs) approved by the BSP. Financial institutions who fail to do this by November 30 will face sanctions from the BSP.
The two BSP-accredited ACHs that enable and process interbank EFTs are PESONet and InstaPay.
PESONet, which stands for Philippine EFT System and Operations Network, was launched in November 2017. PESONet processes EFTs in bulk, which enables individual depositors and businesses to transfer large amounts of money digitally across financial institutions. However, as PESONet’s system groups transactions and processes them in batches, the service can only be used during banking days and transfers completed at the end of the day.
Alternatively, InstaPay was launched in April 2018 and enables interbank EFTs in real time. For depositors and clients of participating InstaPay institutions, this means the services can be availed of any time and any day including weekends, making it ideal for clients who use electronic banking as a way to extend banking hours. However, InstaPay has a threshold and the service can only process a maximum of Php 50,000 per transaction. There is no limit to how many transactions a user can make each day.
Under PISONet and InstaPay, only the sender is charged a fee for transferring funds. The fee for these services vary per bank. The recipient will always get the full amount being sent.
43 banks and NBFIs already offer PISONet-enabled services in some form. This is the statistic as of end-June, according to Philippine Payments Management, Inc. (PPMI). PPMI was formed by financial institutions as the company responsible for overseeing the two ACHs. From the same source, thirty instutions already offer InstaPay services, however most are limited to simply receiving funds.
Despite the limited participaton, as of July 31 institutions who have signed up with PISONet have already processed over 3.4 million transactions, a total worth of Php 520.6 billion via PISONet. Over 127,00 transactions worth Php 1.5 billion have been processed through InstaPay.
The measure requiring banks and NBFIs to enroll in the services of ACHs is part of the BSP’s National Retail Payment System project, which aimes to make 20 percent of all transactions in the Philippines electronic by 2020. In 2015, only one percent of all transactions were electronic.