2 ATM systems to merge

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MegaLink-Bancnet integration to lower depositor charges

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TWO of the country’s largest automated teller machine (ATM) networks, Megalink and Bancnet, are set to consolidate formally this week, which will mean lower fees and charges for depositors using any of their machines.

The three networks, including Bank of the Philippine Islands’ Expressnet, currently charge a certain amount when a depositor uses an ATM of a bank outside of his network.

In his opening remarks during the monetary authority’s annual reception for the banking community on Friday, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. announced that the Bankers Association of the Philippines (BAP), Bancnet and MegaLink will formalize the consolidation of the two ATM networks this week.

“This is a milestone that we’ve been looking forward to. The way to the greater goal of establishing a national retail-payment system that will achieve interoperability, efficiency, security and inclusiveness in the way we settle our financial transactions,” he said.

The central bank has long planned to establish a national retail payment system interconnected electronically either through card or mobile phones, and the merger of Megalink and Bancnet’s ATM networks should bring this goal closer to reality.

An efficient electronic payment system would help reduce the number of unbanked Filipinos and  also lessen the practice of transacting by check or physical cash.

A recent study estimates that Filipinos make 2.5 billion payments per month, yet only 1 percent of these payments are electronic because 99 percent are still paid in cash or check payments.

Nestor Espenilla Jr., BSP deputy governor for supervision and examination, said that the consolidation will result in lower ATM charges as it will eliminate double processing.

“What will happen is that since there would be multi-channels, there would also be competition among other means of payments, not just on ATM. The customers will have choices and if there are choices, then there is pricing pressure,” he explained.

The BSP official also pointed out that the ATM network consolidation is just a first step to the monetary authority’s end game of setting up a national retail payment system.

“At the end of the day ATM is still a cash-based world. The only thing that is automated is the withdrawal of cash but the payment is still in cash. Our vision is more than that,” he said.

Meanwhile, BAP president Lorenzo Tan said the MegaLink-Bancnet consolidation will result in a more efficient banking system and banks can save money for research and development.

“We’re moving it toward efficiency. Imagine that you are dividing the cost over more transactions. So the unit cost will go down,” he said.

“Hopefully, if we can save 10 cents, we pass on the half of that to the consumers.  It is a way of lowering banks’ unit costs and making them more efficient. The more earnings a bank has, the more they can get more money for research and development,” he concluded.

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1 Comment

  1. ExpressNet still myopically insists in not cooperating so that the country can have just ONE ATM network system. Since the inception of the ATM system many years ago in the Philippines, BPI doggedly wanted to have their own way. But this might be a foolish strategy today especially with the merger of 2 out of the 3 networks. It is won’t be surprising if this development will cause a massive “churn” (transfer of customers to other banks) on BPI’s customer base.