BSP stands firm on transfer fee rules
The Bangko Sentral ng Pilipinas (BSP) said banks and e-wallets that may be struggling to comply with rules requiring lower fund transfer fees should rethink their business models and not expect regulatory concessions, saying it would not create separate pricing rules for different sectors despite their varying strategies.
Speaking to reporters on Monday, BSP Deputy Governor Mamerto Tangonan said creating a separate regulation to accommodate varying revenue and cost structures could create “congestion” in the payments network.
This, amid concerns on some financial institutions, particularly those that rely heavily on transfer fees as a source of revenue. Last week, the BSP invited several financial institutions to discuss their compliance with the new rules.
Bottlenecks
Making regulatory concessions for certain sectors could also create arbitrage, or allow some supervised firms to exploit differences in regulatory treatment, Tangonan said.
“If you apply different rules for some segments and you apply different rules to another, you will be introducing inefficient bottlenecks in the system,” he said.
Under BSP Circular No. 1238, banks and other BSP-supervised financial institutions must ensure that fees for person-to-person digital fund transfers between accounts held at different institutions do not materially differ from those charged for transfers between accounts within the same institution.
Because transfers between accounts within the same bank or e-wallet are typically free, the central bank said any additional fee for interbank or interwallet transfers should largely reflect charges paid to the network switch operator.
The BSP also said that while institutions may adopt differentiated pricing based on legitimate business and operational considerations, they must ensure that their fee structures do not result in one group of users unfairly subsidizing another.
Increase in transfers
Tangonan earlier noted that preliminary reports from banks and other financial institutions point to a sharp increase in digital transfers following the fee cuts. He also said banks had been signing up new customers after the central bank required supervised financial institutions to accept the national ID as sufficient proof of identity when opening deposit and transaction accounts.
Looking ahead, Tangonan said financial institutions would need to “evolve” their business models to comply with the new rules without taking a significant hit to revenue. He said firms could expand higher-value services such as lending, insurance and investments while lowering costs through shared infrastructure.
“I think there would be room for innovation,” he said. “There is still a huge unmet need of the people to save, to access responsible credit, [and] to protect themselves from shocks.”
