BSP crafting guidelines for electronic retail payments

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) said it is crafting guidelines for an electronic retail payments system in its push toward expanding the reach of financial services to more Filipinos.

Central bank Governor Amando M. Tetangco Jr. told reporters that an efficient electronic payment system will help achieve the BSP’s goal of financial inclusion, which essentially means reducing the number of unbanked Filipinos.

“We will be coming up with the framework and the guidelines so we’ll have a payments system that is designed for our markets,” Tetangco said.

An electronic retail payment system includes not only the use of Automated Teller Machine cards, but also cheques, mobile wallet and the like.

The country sees more than 2.5 billion payment transactions per month but only one percent of that is electronic, the rest being cash and cheque payments, Tetangco noted.

The central bank has started looking at case studies for the proposed electronic payments system and it has also tapped the Better Than Cash Alliance, a global private-public sector organization, for assistance.

“There are still many unbanked people in the Philippines and many electronic transfer facilities are limited. Also, most traditional retailers such as wet market stores, sari-sari stores, and carinderias still and only transact in cash,” Tetangco said.

“So we need to have an appropriate market infrastructure to promote the use of electronic payments. Right now, there’s a lack of interoperability in the system… and another one is there is a need for greater transparency in pricing including the pricing of ATM fees,” he continued.

An appropriate framework for a “robust financial market infrastructure,” he said, would be aligned with principles put together by the Bank for International Settlements.

At the same time, the BSP is crafting a draft proposal for a national payments system, separate from the amendments to the Central Bank Charter, in order to push through with an electronic payments system.