(Source: Manila Bulletin | December 10, 2015)
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said that with the National Retail Payment System (NRPS) – which the central bank launched late Wednesday – Filipinos will be encouraged to transact using electronic payments more in the coming years.
At the moment, only one percent of the 2.5 billion payment transactions per month amounting to about $74 billion are paid through electronic systems. “With NRPS, we hope to see the one percent share of electronic payments increase to at least 20 percent by 2020,” said Tetangco in a speech during the formal launching.
The balance of 99 percent is paid in cash or through checks, Tetangco reiterated, citing a diagnostic report by Better Than Cash Alliance.
With the launching of NRPS, the next step is in creating a Payment System Management Body or PSMB which Tetangco said is industry-led. “Its responsibility is to create clearing standards and rules that bind all payment system participants. In effect, it shall champion the good governance of the NRPS.” He said they expect to have the PSMB in place within the first six months next year.
Tetangco, again citing the report, said shifting from check to direct credit would also save the banking sector about $1.52 per payment transaction. “If all local checks cleared in 2013 had switched to electronic, the sector could have saved about $272 million. This is not a small amount – this is equivalent to 8.5 percent of the net profit of the entire banking sector in 2013,” he said.
Tetangco also noted that countries with high levels of electronic payment transaction per capita also have high levels of per capita income.
Basically, NRPS establishes a “safe, efficient, and reliable” electronic retail payment system in a technology-driven consumer market.
In adopting the NRPS, Tetangco also listed policy development plans in the future to update regulations that will support the electronic payment system.
These rules should improve access to financial services. “This will be made possible by enabling them to have an account to receive and store funds, make payments and/or transfer funds to other accounts maintained in other institutions anytime, anywhere through the use of any electronic device, made at reasonable cost and convenience of the customer,” said Tetangco.
The NRPS will not only begin the shift away from the use of cash and checks for payments but also “ensures that there is no discrimination in access by all qualified participants to the retail payment system.”
“Serving this huge untapped market can benefit from collaborative effort between banks and non-bank service providers who have the capability to reach frontier areas not served by banks,” said Tetangco.
The “modernized payment system” has near-real time clearing and also provides clearing transactions that results to transparency. “This is vital for the BSP and the payments industry to properly manage risks and ensure that clearing and settlement expectations are fulfilled,” said Tetangco.