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- The Bangko Sentral ng Pilipinas (BSP) aims to eliminate transaction fees on small-value fund transfers to encourage cashless or digital payments among Filipinos.
- BSP Governor Felipe Medalla expressed that the current transaction fee worth ₱15 may still be too high for small transactions, particularly for the poor. The central bank is considering a “cost-sharing system” with banks and payment system operators to eliminate fees from minimal money transfers.
- The BSP has been promoting digital payment alternatives, including continuing its pilot test of Central Bank Digital Currency (CBDC), launching the “Bills Pay PH” initiative, and implementing stricter rules for electronic money (e-money) to ensure safety for users.
The Bangko Sentral ng Pilipinas (BSP) aims to remove the transaction fee on small-value fund transactions to further promote the use of cashless or digital payments among Filipinos.
In a twitter thread, BSP Governor Felipe Medalla stated that the transaction fee worth ₱15 may still be too much for small transactions, especially for the poor. To address this, he expressed that the central bank is ready to work with banks and payment system operators to study a “cost-sharing system” that will eliminate fees from minimal money transfers.
“We may even consider cutting the reserve requirement to enable banks to make these concessions. All these, in pursuit of a financial system that leaves no one behind,” he stated.
The reserve requirement ratio (RRR), currently 12% for huge banks, —essentially a tax on banks– is the percentage of deposits that financial institutions must keep on hand. Last December, Medalla stated that if the inflation will decrease within their target range, the RRR of big banks could still be cut down to single-digit by the end of his term in July.
“After all, the true measure of an effective policy lies not in its complexity but in its ability to bring those at the margins into the fold,” he affirmed.
In a bid to make digital payments widely adopted in the country, the BSP has been actively promoting digital alternatives for financial transactions.
Last month, Medalla confirmed that the central bank is continuing its pilot test of Central Bank Digital Currency (CBDC) between financial institutions, businesses, and government entities. The CBDC project is part of the Central Bank’s initiative to shift 50% of all financial transactions to electronic channels. (Read more: For Wholesale Transactions Only: BSP Confirms Continuation of Pilot Test of Country’s Own Central Bank Digital Currency)
In December 2022, they also launched the “Bills Pay PH” initiative to give consumers more options to pay their bills.
In addition, the central bank also changed the rules that govern how electronic money (e-money) works in the Philippines recently to make sure that electronic money is safe and works well for everyone who uses it. (Read more: BSP Implements Stricter Rules for E-Money Amid Heightened Cybersecurity Risks)
The BSP also announced that users can report problems concerning their licensed providers directly to the central bank to cater with the increasing adoption and involvement of Filipinos with Virtual Asset Service Providers (VASPs). (Read more: BSP Makes it Easier to Report Problems with Locally-Licensed Crypto Exchanges)
This article is published on BitPinas: BSP Governor Explores Eliminating Minimal Transfer Fees
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.