DUE to absence of appropriate managements system, most rural banks in the country could not engage yet in retail payment system.
“The banks now are encouraged to join [retail payment systems like] InstaPay and PESONet but before they could join those channels, the BSP will have to look if it has an appropriate management system to ensure that the movement of funds will be done in a safe manner,” Bangko Sentral ng Pilipinas managing director of the Financial Supervision Subsector III Arifa A. Ala said in an interview Wednesday, July 17.
“Universal and commercial banks already joined but many of the rural banks are not yet engaged because they do not have appropriate management system to be able to join,” she added.
Ala said there are 432 rural banks operating around the country as of June 2019 but only a small percentage have engaged in retail payment system which could give a more convenient transaction processes to financial consumers and an opportunity to have a wider reach.
One of the mandates of the BSP under National Retail Payment System (NRPS) is “to provide direction in carrying out retail payment activities through BSP supervised financial institutions (BSFIs)”.
Accordingly, the key outcome of the NRPS is to increase adoption of electronic retail payments from one percent electronic payments in 2013 to 2o percent electronic payments by 2020.
In the regulatory framework of NRPS, it stated that the core principles are interoperability, inclusivity, and cooperation and competition which was coined into “coopetition”.
Ala said by enabling interoperability or the transfer of funds from one account to another account in any participating financial institution, the growth in transaction volume will help achieve economies of scale, which may further bring down end-user cost.