The Philippines’ Bangko Sentral ng Pilipinas (BSP) said that digital transactions in the country continue to rise with the public turning to electronic payment facilities to carry out financial transactions safely amid the COVID-19 health crisis via news reports.
Combined PesoNet and InstaPay transactions in April this year were higher by 276% in volume and 127% in value, compared to the figures recorded during the same month in 2020. The PesoNet and InstaPay are two automated clearing houses under the National Retail Payment System (NRPS). PesoNet is a batch electronic fund transfer (EFT) which can be considered as an electronic alternative to the paper-based check system while the InstaPay is a real-time, low-value EFT for transaction amounting up to USD 1,000 and is useful for e-commerce.
Also, the volume and value of QR PH person-to-person (P2P) payments in April this year increased by 23% and 38%, respectively, compared to the figure posted a month earlier. The BSP said a turning point in the country’s digital transformation journey is the National QR Code Standard or QR PH, which leverages the efficiency and affordability of the QR technology.
The BSP also revealed that 82 BSP-Supervised Financial Institutions (BSFIs) were participating in PesoNet and 52 in InstaPay as of end-April 2021. The Philippine central bank said that the data is encouraging. These indicate the sustained adoption of digital payments in the country. The preference of consumers for safety in their financial transactions, coupled with the readiness of the BSFIs to offer digital payment choices that are safe, convenient, and affordable will continue to support the widespread use of digital payments.
With over a year into the pandemic, the BSP said that financial consumers are adapting to the use of technology for their financial transactions. New adopters have experienced first-hand the advantages of going digital. Their positive experiences are expected to create a ripple effect and to promote the wider use of digital payments, the central bank added.
As reported by OpenGov Asia, the BSP’s Digital Payments Transformation Roadmap 2020-2023 (DPTR) says that the BSP’s thrust to promote financial inclusion and digitalisation of payments is mutually reinforcing: they go together, each enabling the other. With the sudden onset of the COVID-19 global pandemic, the shift towards digital payments has become imperative as physical distancing rules become the norm under the “New Economy” environment. By using digital payments with due care and vigilance, Filipinos reduce the need for mobility and prevent health risks from face-to-face and over the counter (OTC) financial transactions. The greater usage of digital payments will also facilitate the growth of Fintech businesses engaged in e-commerce businesses as the consumption of goods and services is increasingly driven by online purchases.
The BSP’s DPTR strategic outcomes are the following:
- Strengthened customer preference for digital payments by:
- Converting 50% of the total volume of retail payments into digital form, considering that payment services are the gateway of most Filipinos to the formal financial system. This shift can be made by offering customers faster and more affordable payment options that provide greater convenience.
- Expanding the financially included to 70% of Filipino adults, by onboarding them to the formal financial system using payment or transaction accounts. With the use of these accounts over time, they can build financial profiles with their payment service providers (i.e., banks and non-bank e-money issuers).
More innovative and responsive digital financial services characterised by:
- Innovation-driven use of consumer data to design financial products and services that are responsive to the needs of consumers, including those from the lower-income sectors
- PhilSys-enabled Know-Your-Customer (KYC) to allow more individuals to access financial services; and
- Availability of a next-generation payment and settlement system to facilitate real-time processing of financial transactions of the banking public and the Philippine economy.
