Lower InstaPay fees spur digital payments – study

MANILA, Philippines — Removing InstaPay transfer fees doubled transaction activity among DiskarTech users and increased it by about 30 percent among Pulz users, according to a study showing how charges can influence Filipinos’ use of digital payments.

The study was conducted by research nonprofit Innovations for Poverty Action (IPA) Philippines, in partnership with the Bangko Sentral ng Pilipinas (BSP) and Rizal Commercial Banking Corp. (RCBC).

It examined how fees affect transfers through InstaPay, which allows users to send money instantly between accounts at participating banks and electronic wallet providers.

About 15,000 customers of RCBC’s Pulz and DiskarTech mobile banking platforms were randomly assigned different InstaPay fee levels, including free transfers and low charges. Researchers analyzed actual transactions alongside participant surveys to assess how customers responded.

The findings, presented at a forum at the BSP headquarters, showed that lower fees encouraged more transactions. It also encouraged customers who had not previously used InstaPay to begin making transfers.

The increase in new users was more pronounced among DiskarTech clients, while the effect among Pulz customers was smaller.

“In the BSP Consumer Expectation Survey, one in three Filipinos consider high fees as a barrier to more frequent use of digital payments. Hence, pricing affects not only adoption but also sustained engagement,” BSP Deputy Governor Mamerto Tangonan said.

For banks and other payment providers, the findings suggest that transfer charges influence how often customers use their services, making pricing relevant to efforts to bring more people into the formal financial system.

“The study shows that when we reduce friction, people transact more. That makes pricing not just a revenue decision, but also an inclusion decision,” RCBC executive vice president and chief innovation and inclusion officer Lito Villanueva said.

Russell Toth, IPA principal investigator and associate professor of economics at the University of Sydney, said lower charges also had a measurable effect on customers who had not used InstaPay in the months before the study.

“The effect isn’t massive, but measurable and noticeable,” Toth said.

The release highlighted the role of free transfers in encouraging previously inactive users to transact, especially among lower-income participants.

Still, the findings do not establish that removing charges alone would be enough to sustain wider use of digital payments.