Breaking the Cost Barrier: BSP's Plan to Remove Fees for Small Payments

 

In recent years, the Philippines has been making significant strides in promoting digital payments and financial inclusion. The country's central bank, Bangko Sentral ng Pilipinas (BSP), has been at the forefront of these efforts, introducing policies and initiatives aimed at increasing the adoption of digital payments and making them more accessible to Filipinos.

One of the biggest barriers to the widespread adoption of digital payments in the Philippines is the fees charged for small-value fund transfers. Many Filipinos, especially those from low-income households, are deterred by the fees, which can be quite high relative to the amount being sent. As the BSP noted in a recent tweet, if the fee is P15 for a P200 transaction, then the fee is quite large relative to the amount being sent.

To address this issue, the BSP has expressed its readiness to work with the industry to find ways to eliminate fees on small-value fund transfers and incentivize more Filipinos to use digital payments. This is a significant development that has the potential to drive the widespread adoption of digital payments in the country.

One of the ways in which the BSP is working to eliminate fees on small-value fund transfers is by encouraging the use of digital wallets. Digital wallets, also known as e-wallets or mobile wallets, are digital versions of traditional wallets that allow users to store, send, and receive money using their mobile phones. Digital wallets have become increasingly popular in the Philippines, with several providers offering low or no fees for small-value fund transfers.

Another way in which the BSP is incentivizing the use of digital payments is by introducing policies that promote financial inclusion. For example, the BSP has required banks to offer basic deposit accounts, which have lower minimum balance requirements and fewer fees than traditional savings accounts. This has made it easier for Filipinos to access banking services, including digital payments.

The BSP is also promoting the use of QR code payments, which allow users to make payments by scanning a QR code with their mobile phones. QR code payments are faster, more convenient, and more secure than traditional cash payments, and they are also cheaper for merchants, who do not have to pay high fees to accept digital payments.

In conclusion, the BSP's commitment to eliminating fees on small-value fund transfers and incentivizing the use of digital payments is a positive development that has the potential to drive financial inclusion and economic growth in the Philippines. By working with the industry to promote the use of digital wallets, QR code payments, and other innovative payment solutions, the BSP is laying the foundation for a more efficient, accessible, and inclusive financial system that benefits all Filipinos.