BSP wants more informal sellers to accept digital payments

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is looking to bring more small and informal merchants into the digital payments ecosystem by easing onboarding requirements and addressing high transfer fees, as it pushes for broader use of electronic payments across the country.

BSP Deputy Governor Mamerto Tangonan said the broader objective of newly released Circular 1238 is to widen the network of merchants and digital payment acceptance points, particularly among smaller businesses that have limited access to digital payment services.

“The big picture is to expand the base of merchants and digital payments acceptance points. At the same time, the pricing mechanism will help boost consumer usage and hopefully remove high fees as one barrier to entry,” Tangonan told The STAR.

“The result is more robust digital payments usage and higher transaction volume per capita,” he said.

Tangonan said an “equally important salient point” of the circular is the easier onboarding of low-risk merchants, including micromerchants and informal sellers.

Under the new rules, only the national ID or any valid ID may be required to onboard low-risk merchants, depending on the risk management profile of payment service providers or operators of payment systems with merchant acquisition licenses.

The circular, signed by BSP Governor Eli Remolona Jr. on June 17, introduced amendments to the National Retail Payment System framework and the regulatory framework for merchant payment acceptance activities.

It came alongside the BSP’s lifting of the moratorium on increases in InstaPay and PESONet fees, which had prevented payment service providers from raising electronic fund transfer charges.

Tangonan said payment service providers could adjust person-to-person electronic fund transfer (EFT) fees once the circular takes effect, but only “after ample prior notice to their customers.”

“The lifting of the moratorium on EFT fee increases was based on two conditions: waiving fees for small-value merchant payments and issuing a pricing mechanism. Since both conditions have been met, the moratorium has been lifted,” he said.

Despite the lifting, Tangonan said any fees charged by payment service providers must still be reasonable and based on the actual cost of delivering the service.

He said total service costs should be fairly allocated across transactions without unduly burdening off-us transfers, or transactions between different financial institutions. Off-us transfers are transactions where the sender and receiver use accounts from different banks or e-wallets.

Under the circular, off-us fees should not be greater than on-us fees, or transfers within the same institution, plus any switch cost directly attributable to the facilitation of off-us person-to-person EFT.

Tangonan said providers’ pricing decisions would still be shaped by competition and their own cost structures.

He also cited studies in the Philippines showing that free electronic fund transfers, including off-us transactions, can encourage greater usage.

For consumers, the BSP said key safeguards remain in place.

Tangonan said recipients of person-to-person electronic fund transfers would still receive the full amount without deductions.

“Nothing changes except the pricing mechanism for person-to-person EFTs,” he said. “E-payment fees must still remain lower than their counterpart manual or over-the-counter transactions.”

The BSP has been pushing financial institutions to expand digital payments as part of its broader financial inclusion agenda. By making it easier for small merchants to accept digital payments and ensuring that transfer fees remain cost-based, the central bank expects electronic transactions to become more accessible for both consumers and businesses.