INDUSTRY stakeholders have welcomed moves by banks to waive or reduce bank transfer fees, saying it could encourage more Filipinos to participate in the digital economy, with one bank saying it expects millions to get on the digital bandwagon with its waiver of fees.
“Any support to improve the ease of use and encourage the use of digital transactions is a welcome development,” said Melanie Ng, regional governor of the Philippine Chamber of Commerce and Industry-Central Visayas.
State-run Land Bank of the Philippines announced Thursday, June 15, 2023, that it has reduced its fund transfer fee via InstaPay.
All fund transfer transactions, regardless of amount, will now be subject to a fixed transaction fee of P15, down from the previous P25.
“By lowering the fund transfer rate, more customers will benefit from the convenience and efficiency of our products. This is part of our commitment to provide accessible and affordable digital banking solutions, and to help expand financial inclusion,” said Landbank president and chief executive officer Lynette Ortiz in a statement.
In the first three months of the year, Landbank, through its three digital platforms, facilitated transactions amounting to a total of P265.7 billion. These platforms are Landbank Mobile Banking App and iAccess for retail clients and weAccess for corporate accounts.
Reacting to the news, Cebu Chamber of Commerce and Industry president Charles Kenneth Co said: “I hope the other banks will follow Landbank’s move in lowering their transaction fees to P15. By encouraging digital payments, commerce will be easier and faster.”
Millions
On the other hand, BanKo, the microfinance arm of the Bank of the Philippine Islands (BPI), in May announced that it has made it free to send money via InstaPay through its mobile app.
BanKO clients can transfer up to P50,000 a day to over 70 InstaPay partner banks and e-wallets in real-time, anytime and anywhere at no cost. This benefits anyone who opens an account, as well as BanKo’s 315,000 active depositors nationwide.
The bank said by making digital fund transfers more convenient, it can now attract millions of self-employed micro-entrepreneurs, informal workers and other individuals from the unbanked and underbanked segment, and help them achieve their financial goals.
InstaPay is an electronic fund transfer (EFT) service operated by BancNet Inc. Another popular EFT service is PESONet operated by the Philippine Clearing House Corp.
InstaPay is for real-time, low-value electronic fund transfer for transactions up to P50,000 a day while PESONet caters to high-value transactions.
Central bank’s call
The waiving of charges also supports the Bangko Sentral ng Pilipinas’ (BSP) call for banks to remove fees for small transactions and encourage more Filipinos to use digital payments.
In his Twitter post on Feb. 25, BSP Gov. Felipe Medalla said the central bank is ready to work with the industry to find ways to eliminate fees on small-value fund transfers and incentivize more Filipinos to use digital payments.
“If the fee is P15 for a P200 transaction, then the fee is quite large relative to the amount being sent,” Medalla said.
The BSP aims to digitize 50 percent of the volume and value of retail transactions and to have 70 percent of Filipino adults become part of the formal financial system by this year under its Digital Payments Transformation Roadmap.
Cebu Bankers Club president Chester Benedict Go agrees with Medalla on the plans to lower or remove fees to encourage the public to use the banks’ digital platforms.
“There are a lot of people using digital banking apps already. They pay their bills, (engage in) bank fund transfers and other services, but I still think that people still hesitate to do fund transfers to other banks because of the charges,” Go told SunStar Cebu.
But he stressed that it is up to the banks to lower or waive fund transfer fees.
“We commend Landbank’s move as this could only benefit customers. As the fee structure for retail payments and transfers is completely market-driven, other providers will respond as appropriate to their respective market strategies. In the end, lower fees would be a boon to users of digital payment systems,” said Albert Concha, chairman of the Rural Bankers Research and Development Foundation, in a separate interview.
Other banks that waived InstaPay fees for individual transactions as of April 30 are CIMB Bank Philippines Inc., Rural Bank of Guinobatan Inc. (waives fees until June 30), SeaBank Philippines Inc. (free for first 15 sending transactions per week), and Tonik Digital Bank Inc.
Other banks implement fees ranging from P8 to P25.
As for PESONet’s individual transactions, banks, namely BanKo, CIMB Bank Philippines Inc., Country Builders Bank Inc., DCPay Philippines Inc., East West Banking Corp., HSBC Savings Bank (Phils) Inc., Maya Bank Inc., PayMongo Payments Inc., Philippine Business Bank, Rural Bank of Guinobatan Inc. (waives fees until June 30), SeaBank Philippines Inc. (free for first 15 sending transactions per week), The Hongkong and Shanghai Banking Corp., Tonik Digital Bank Inc., and Union Bank of the Philippines have waived their transfer fees through digital channels.
Other banks collect fees ranging from P8 to P600.
Transactions surge
The BSP showed that the value of transactions that went through InstaPay grew 39.4 percent to P1.45 trillion in the first four months of the year from P1.04 trillion in the same period last year. The volume of InstaPay transactions also went up by 31.1 percent to 218.3 million from 166.4 million.
The value of PESONet’s transactions, on the other hand, rose 25.5 percent to P2.36 trillion as of April from P1.88 trillion in the same period a year ago. Its volume of transactions increased 11.4 percent to 29.4 million from 26.4 million.