THE BANGKO SENTRAL ng Pilipinas (BSP) approved the designation of major electronic fund transfer services PESONet and InstaPay as Prominently Important Payment Systems (PIPS) to promote consumer welfare amid the central bank’s digitalization initiative.
“The designation of PESONet and InstaPay as PIPS is considered timely, as these payment systems will facilitate the launch of other use cases for digital transactions, such as interoperable bills payments and direct debits,” BSP Governor Felipe M. Medalla said in a statement on Thursday.
Under the Payment System Oversight Framework, PIPS refers to a payment system that could potentially cause negative economic impacts or undermine the confidence of the public in the circulation of money but not trigger or transmit systemic risk.
In accordance with the National Payment Systems Act (NPSA), the designation of PESONet and InstaPay as PIPS would subject them to closer BSP supervision and monitoring to protect public interest.
“This further promotes consumer welfare as we continue making progress toward the BSP’s objective of reaching 50% digital payments by 2023,” the BSP chief said.
PESONet and InstaPay are digital payment systems under the National Retail Payment System launched in 2017-2018.
PESONet is an electronic fund transfer service operated by the Philippine Clearing House Corp. It is a viable alternative for checks and recurring payments, the central bank said.
Meanwhile, InstaPay is a real-time, low-value payment substitute for cash transactions. It is handled by BancNet, Inc.
The two payment systems are expected to comply with international standards that foster safe, efficient, and reliable operations, particularly those provided under BSP Circular No. 1126 series of 2021.
The circular regulates the adoption of the Principles for Financial Market Infrastructures for Designated Payment Systems.
Digital payments rose in terms of volume and value in 2021 as consumers and businesses used online channels amid mobility restrictions brought by the pandemic, the BSP said last week.
The share of digital payments in the total volume of retail transactions in the country rose to 30.3% in 2021 from 20.1% a year earlier, according to latest data from the central bank.
Merchant payments, peer-to-peer remittances and business transactions of salaries and wages to employees were the key contributors to the increase in digital payments, all of which are high-frequency, low-value retail transactions.
The BSP wants digital payments to make up 50% of all transactions both in terms of volume and value by 2023. — Keisha B. Ta-asan