The Bangko Sentral ng Pilipinas will launch a new national retail payments system this year in line with its goal to supplement the use of cash in payment transactions.
“There’s something big that’s going to happen by the end of the month. The NRPS project basically creates a shared clearing and settlement system that will allow banks to offer digital financial services in an inter-operable way,” Bangko Sentral Deputy Governor Nestor Espenilla Jr. told reporters in an interview.
“It means from one single account, you can do all of your transactions and deal with anyone,” Espenilla said.
“There are two priority cases we have identified and we will be working with banks to establish [them]. What we’re targeting to happen is to have the signing of agreements by end of the month to set this up and within the year to actually operationalize the schemes,” Espenilla said.
These schemes include the batch electronic fund transfer and instapay.
Espenilla said the batch electronic fund transfer pertained to the replacement of checks. “You can transfer from your account to any other account online payments, remittance, but it will happen frequently so there’s clearing and settlement,” he said.
Instapay pertains to the immediate availability of funds. “There will be mechanisms to make it happen real-time. Those are two cases but there are others down the road. These will be the priorities because we think these are the ones that have the most traction for retail payments system,” he said.
He said Bangko Sentral’s ultimate goal was to drive retail payments from 1 percent (when a survey was done in 2014) to 20 percent of total volume of transactions by 2020.
He said there would be multilateral agreements signing between banks that would allow them to transact with one another digitally. He said after the signing of documents, the next step would be setting up the structures.
Bangko Sentral Governor Amando Tetangco Jr. earlier said the proper implementation of the national retail payment system would not only contribute significantly to financial inclusion efforts of the government, but would also improve the balance sheet of domestic banks.
Recent data from the Better-Than-Cash Alliance showed that of the 2.5 billion payment transactions per month in the country worth $74 billion, only one percent was done electronically.
A study also showed that 8.5 percent of earnings of commercial banks could be saved if 99 percent of the 2.5 billion transactions were done electronically. Also, banks could have a cost savings of 25 percent to 26 percent of invoice processing per annum because of NRPS. This not to mention the reduced cash handling cost.
The system, with a faster payment turnover, could lead to higher economic activities. Countries with a high level of e-payment were found to have a higher level of per capita income.
The national retail payment system is a policy and regulatory framework that aims to establish a safe and efficient reliable retail payment system in the country.
