Payments operators pressed to lower digital transaction fees

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) wants financial institutions to establish a “market-based” and “fair” pricing mechanism for fees they collect on electronic fund transfers, in a bid to lower—if not eliminate—transaction costs for Filipinos.

The BSP is soliciting comments from stakeholders on a draft circular that would guide financial firms in adopting a pricing mechanism for fees on fund transfers, regardless of the size of the transaction.

Notably, the fresh proposal no longer included the BSP’s explicit plan previously to eliminate the fees on small-value personal fund transfers.

READ: Zero fees for electronic fund transfers eyed

Instead, the new draft circular would compel operators of payment systems (OPS) to ensure that the fees were based on the actual costs of sending funds electronically subject to prevailing market conditions.

“The pricing mechanism must be adequately supported by an analysis of costs incurred by the BSFI (BSP-supervised financial institution) in delivering electronic payment products and services, which may be subject to validation by the BSP,” the document read.

“The pricing mechanism shall not unduly favor one end- user relative to others,” it added.

Approval

It was unclear how the previous proposal to waive the service fee on small fund transfers was received by banks. Nevertheless, any reduction to transaction costs would bode well for the central bank’s goal to boost digital transactions.

Latest data showed the share of digital payments to total retail payment transactions in the country grew to 52.8 percent in 2023, from 42.1 percent in 2022. That meant out of the 5 billion total monthly transactions recorded in 2023, more than 2.6 billion of them were successfully converted to digital form.

Figures from the BSP showed the current InstaPay fees for individual transactions range from as low as P8 to as high as P75, while PESONet transfers could cost between P8 and P600 for consumers.

Under the proposed circular, regulated entities must obtain the BSP’s approval prior to any increases in existing fees and charges, or introduction of new fees on digital payment transactions.

(2025/05/06-02:10)