The Bangko Sentral ng Pilipinas wants banks and other financial firms under its supervision to waive the service fee on electronic fund transfers, but only for personal transactions and payments to micro, small, and medium enterprises (MSMEs), as it doubles down on efforts to transform the country into a cash-lite economy.
It is collecting comments from stakeholders on a draft circular that would bring the cost of person-to-person electronic money transfers and micro-merchant payments to zero. BSP supervised financial institutions have until October 11 to submit their feedback on the proposal.
Once the circular is approved by the policymaking Monetary Board, the BSP said payment service providers must make the necessary adjustments to comply with the new rules starting April 1, 2025.
Under the draft document, electronic fund transfers would be free of charge for personal transactions as long as they are within the threshold set by the BSP. The central bank said no fees would be collected from person-to-person digital money transfers if done either as a remittance or lending of funds for “personal, family, or household purposes and not conducted in the ordinary course of business.”
Sending money via electronic channels is also considered a personal transaction – and therefore free of charge – if the number of digital fund transfers from an account does not regularly exceed 10 times a week.
Transactions fees will be collected for fund transfers beyond those thresholds, the regulator noted.
Meanwhile, the BSP also wants zero fees for digital payments to small businesses, or firms whose monthly aggregate gross receipts do not exceed P250,000. Transactions that are not covered by that exemption must pay the fees, which should be “proportional to the cost of the services offered in order to sustain the business operations of the parties involved.”
Reducing transaction costs would bode well for the central bank’s goal to boost digital transactions, as it makes it more convenient for the general public to transact digitally, and could even stimulate the economy as more Filipinos can seamlessly move money without needing to go to the bank to withdraw cash.
This initiative of the BSP, if successful with the cooperation of the country’s banks, should be one that will result in a net benefit for a greater chunk of the population.*
