MANILA, Dec. 10 (PNA) — Technological innovations help make people’s lives easier.
This includes mode of payment, as penetration of mobile phone usage in the country is very high.
However, digital retail payments in the Philippines lag behind its neighbors, a study by Better Than Cash Alliance showed.
Electronic payments in the country only account for one percent of the 2.5 billion monthly payment transactions in the Philippines, very low compared to the four to five percent in other Association of Southeast Asian Nations (ASEAN) countries.
The 99 percent are accounted for by cash and check payments.
Thus, the central bank has teamed-up with banks and non-bank electronic money issuers for a national retail payment system (NRPS) to interconnect retail payment system in the country.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr., in a briefing, said NRPS is targeted to increase efficiencies and provide both customers and businesses more access to financial services.
“It is targeted to increase total electronic payments on retail transactions by 20 percent by 2020,” he said.
Academic studies based on empirical data showed that a shift from paper-based to electronic-based payment could result to an annual savings to a country’s economy of about one percent of its total output.
Espenilla, however, stressed that the change will not transpire overnight.
To date, the central bank and all other stakeholders like banks and electronic money issuers are finalizing the creation of a non-profit, self-governing entity that would set policies and standards as well as monitor the implementation of these policies.
Espenilla said the central bank cannot regulate everything, thus, the need for a central governing body for NRPS.
He said the nine-person Executive Board will be composed of representatives from banks and non-bank entities and their inclusion will be based on the volume of their electronic payment activities, not their asset size.
The Board is targeted to be in place by the first half of 2016 while interconnection of the payment system is seen to be in place by 2017.
Transaction fees for this system was not discussed since the payment system is seen to create a bigger pie of opportunities for industry players.
Espenilla said the central bank has not really practiced price control to provide competition among banks and non-bank entities.
“So, this one actually creates that framework where there is competition… bank and non-bank competition. If we decide this properly, the forces of competition will keep cost low,” he added. (PNA)