Business, government transactions to boost digital payments

BUSINESS and government transactions will continue to boost the growth of digital payments in the Philippines moving forward, with the central bank working to develop electronic schemes to aid consumers in their shift online.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a forum yesterday that the central bank is working to develop and improve electronic fund transfer and QR payment schemes.

Mr. Diokno said they are developing a person-to-merchant QR payment scheme apart from the person-to-person QR transactions that are now available. 

“This initiative is expected to benefit not only large business organizations but also the small unbanked vendors such as peddlers, sari-sari store owners, and entrepreneurs,” he said.

Mr. Diokno added that they are building an interoperable bills payment facility that will streamline the fragmented mechanisms currently in place.

“With the facility, billers will be capable of collecting from the customers even if the payment service providers of the billers are different from those of the customers,” he said.

The central bank chief said the framework includes a request to pay service, which will give both payers and payee the options of paying in full, paying in part, making a counteroffer for extension, or to fully decline a payment.

He added that the BSP is also crafting a mechanism for a direct debit use case, which allows a payer to give a payee authority to draw funds from the payer on a regular basis.

“This payment use case is ideal for recurring payments such as monthly rentals, periodic loan amortizations, and quarterly insurance premiums,” Mr. Diokno said.

For electronic fund transfer schemes (EFS), the central bank chief said they are pushing to allow multiple batches of crediting for PESONet, even beyond banking days. Currently, the EFS allows batch transfers that can be credited at the end of a banking day. 

Mr. Diokno said the PESONet has served as a backbone for the EGov Pay facility where 280 national government agencies and local government units are able to receive payments.

Some P1.124 trillion or 86% of the P1.305 trillion worth of taxes paid to the Bureau of Internal Revenue from January to August were done via e-payments, Finance Undersecretary Antonette C. Tionko said in the same forum.

She said P2.6 billion of the payments were done through other channels such as bank and e-wallet transactions, reflecting how Filipinos chose to go online to fulfil their tax obligations.

Meanwhile, Better than Cash Alliance Managing Director Ruth Goodwin-Groen said only 12% of private sector salaries are being paid directly to bank accounts, meaning a majority of employees still receive their pay through cash or cheque.

She said less than 2% of supplier payments are made digitally by formal businesses, adding informal businesses, which make up 85% of all supplier payments, still rely on cash.

“There is a wonderful opportunity in the Philippines for digitization of business payments,” Ms. Goodwin-Groen said.

The BSP wants 50% of payments done digitally by 2023. Mr. Diokno is bullish that their target could be achieved by end-2022 as the coronavirus pandemic caused a surge in online transactions.

In 2018, e-payments made up 10% of the total transaction volume, moving up from the 1% in 2013, based on a Better than Cash Alliance report. By value, online transactions made up 20% of the total from just 8% in 2013. — L.W.T. Noble

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