Support electronic retail payment, BSP urges
MANILA, Philippines – Banks and financial institutions are urged to support the establishment of an electronic retail payments (ERPs) system to boost savings as well as expand the reach of financial services to more Filipinos.
Bangko Sentral ng Pilipinas (BSP) governor Amando Tetangco Jr. said studies have shown that shifting from paper-based to electronic-based payment system could generate an annual savings up to 1% of gross domestic product (GDP).
National Retail Payment System
Based on the country diagnostics conducted by the Better Than Cash Alliance (BTCA), it showed that Filipinos make about 2.5 billion payment transactions per month worth $74 billion.
However, only 1% are transacted electronically while 99% of the transactions are paid either in cash or checks.
Thus, Tetangco urged members of Bancnet and Megalink to participate in the creation of a National Retail Payment System (NRPS), while the integration of the two of the country’s largest automated teller machine (ATM) consortia is going on.
In January, Bancnet and Megalink signed a memorandum of agreement (MOA) on the consolidation of the ATM network. There are 16,068 ATMs nationwide serving 78 million ATM cardholders as of end-March this year, latest data from BSP showed.
“These are significant milestones indeed but the story is not complete. Our eyes are now set on creating an NRPS and Bancnet should be part of this grand journey,” he said.NRPS envisions Filipinos to have easy access to financial services and have accounts to make payments, the BSP chief said.
It also aims to have more Filipinos receive or transfer funds to other accounts anytime, anywhere, at a reasonable price from any digital device.
Efficient retail payments contribute to the stability and efficiency of the financial system and the economy as a whole, Tetangco said.
“NRPS will allow us to start reversing this ratio. You have the option to have a bigger slice of this huge pie," he said.
He admitted though that while implementing the NRPS is most challenging, it also represents vast opportunities from the business point of view.
The digitization of payments could promote greater financial inclusion, he added.
The National Baseline Survey in Financial Inclusion showed that only 4 of 10 Filipino adults currently have savings, of whom only 32.7% put their money in banks.
The survey also indicated that 47% of Filipinos have debts but banks contribute only 4.4% of their borrowings. The rest are from family, relatives, friends, and informal lenders.
“The NRPS initiative is a rare opportunity for all of us to work together to do something that can be a real positive game changer for the economy and for our people,” Tetangco said. – Rappler.com
Electronic retail payment system image from Shutterstock