Bangko Sentral wants banks, e-wallets to explain fund transfer fee structures

BANKS, electronic wallet (e-wallet) operators, and other financial institutions that have not complied with the Bangko Sentral ng Pilipinas’ (BSP) new rules on retail transfer charges will not face immediate penalties but will be called to explain their fee structures.

BSP Deputy Governor Mamerto E. Tangonan said they will meet this week with “several” financial institutions that have yet to comply or whose adjusted transfer fees fail to satisfy the conditions set by the regulator

“(We invited) those who haven’t moved yet or who appear noncompliant with the circular (to come in for a discussion). I say “appear” because we need to hear their explanation,” he told reporters on Monday.

The invitees include e-wallet operators GCash and Maya, which have both lowered their InstaPay transfer fees to P10 from P15 previously. Mr. Tangonan said the BSP wants them to explain their pricing mechanism.

“Reading the circular, if you want (the off-us fee to be) P10, your transfer to the same bank, or what we call on-us, should be P8.50,” he said. “We invited them to come over to have a discussion. I just want to understand why (they did that).”

“Those that haven’t adjusted their fees appear to be noncompliant with the circular. I said ‘appear’ because we need to hear the explanation,” he added.

Asked if they plan to impose penalties for noncompliant institutions, Mr. Tangonan said: “That comes later.”

“Hindi maganda kung palo agad eh. Kapag naliwanagan na, ayaw pa rin sumunod, ayun… (An immediate sanction isn’t good. That should only come if they already have clarity on the rules but still refuse to comply.)”

BSP Circular 1238 issued on June 17, which took effect on July 4, requires financial institutions like banks, e-wallets, and other payment service providers to adopt reasonable, fair, and market-based pricing for retail digital fund transfers.

Under the new rules, fees charged for person-to-person transactions between different institutions should not be materially different from charges for transfers within the same entity, with the difference in pricing only being the switch cost, or the fee charged by a clearing switch operator to process these off-us transfers.

This is because providing on-us or intrabank fund transfer services, which most institutions already do for free, use the same infrastructure and systems and entail the same operational costs as interbank transactions, with the switching or network fee being the only gap.

“Any differences in fees should be supported by reasonable and directly attributable costs, such as switching or network-related expenses, and should not result in outcomes that discourage interoperability or create undue barriers to interinstitution transactions,” the central bank said in a separate memo clarifying the circular.

The BSP added that institutions should ensure that their fee structures do not result in one user group unreasonably subsidizing the cost of serving another.

Over the past week, several banks have already announced new fee structures. Bank of the Philippine Islands, Land Bank of the Philippines, and Union Bank of the Philippines have permanently waived both their InstaPay and PESONet fees for retail transfers.

Meanwhile, Rizal Commercial is now offering 30 free InstaPay transfers monthly for transactions of at least P100 via the RCBC Pulz app, and unlimited free InstaPay transfers via RCBC Diskartech with a daily transaction cap of P499,999. However, it kept its PESONet transfer fee at P10.

Prior to the BSP circular, some of the financial institutions that were already offering limited and unlimited free retail transfers, either via InstaPay or PESONet or both, are The Hongkong & Shanghai Banking Corp., CIMB Bank Philippines Inc., East West Banking Corp.; East West Rural Bank, Inc.; City Savings Bank, Inc.; UnionDigital Bank, Inc.; BPI Direct BanKO, Inc., A Savings Bank; Netbank (A Rural Bank), Inc.; Own Bank, The Rural Bank of Cavite City, Inc.; GoTyme Bank Corp.; Maya Bank, Inc.; and Maribank Philippines Inc. (A Rural Bank) (Formerly SeaBank Philippines Inc.). — Katherine K. Chan