BancNet expands outsourcing services

MANILA, Philippines - ATM switch operator BancNet is expanding its outsourcing services to its member banks, including operating the switching services of thrift and rural banks.

BancNet chairman Ricardo R. Chua said since smaller banks may find it expensive to operate their own ATM network, particularly switching, “by outsourcing the ATM switching operations to experts like BancNet, banks can go about their business.”

He said they are already in various stages of talks with four thrift banks, with more waiting in the wings.”

The BancNet official implied that the switch operator and the bank could share in the cost of establishing the latter’s ATM network. Likewise, return on investment can be drawn from transaction fees.

BancNet is the switch operator of ExpressNet, which was once one of the major players in the ATM switch operations until 2008, when ExpressNet outsourced its services to BancNet.

ExpressNet chief executive Aurelio Luis Montinola III said by tapping BancNet, banks could focus on their core business. Bank of the Philippines Islands (BPI), Land Bank of the Philippines (LBP) and HSBC are the bank members of ExpressNet.

Aside from ATM switching, BancNet can also help member banks to establish various electronic banking (e-banking) services including Internet and mobile banking.

BancNet accounts for nearly half of the ATM business in the Philippines, with cardholders numbering 11.5 million from 77 member and subscribing banks and non-bank institutions.

It accounts for 5,304 ATM units; 15,410 point-of-sale (POS) terminals; 1,157 POS merchants and 3,960 sites.

The monthly average volume of switched ATM transactions stands at 28.9 million.

Meanwhile, BancNet entered into an agreement with the Philippine Payments and Settlements System (PhilPASS) of the BSP. PhilPASS is a real time gross settlement system where both the processing and final settlement of fund transfer instructions can take place continuously, in real time, in a bank’s demand deposit account (DDA).

It is the same platform being used by local banks in the overseas and domestic remittance.

By tapping PhilPASS, banks can get immediate settlement of payments that normally would take from three to five banking days, as in the case of checks.

“It will take only one banking day to settle payments, or something like five seconds per transaction with PhilPASS, thus reducing settlement risks,” BSP Governor Amando M. Tetangco Jr. said.

The settlement system makes an average 4,500 transactions per day, and it has already made total transactions worth P1.3 trillion.