THE central bank is setting up two electronic payment schemes under the National Retail Payment System (NRPS), a policy and regulatory framework on the principles of electronic retail payment governance in the country.
“There’s something big that’s going to happen by the end of the month. There are two priority-use cases we have identified and we will be working with the banks to establish,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr., told reporters in an interview late Tuesday.
Espenilla said one of the schemes is the Batch Electronic Fund Transfer which will replace the use 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 explained.
“The other one is Instapay, it is about the immediate availability of funds,” he added but did not elaborate.
The BSP and its supervised financial institutions are targeting to sign the agreements on the new payment schemes by end of the month and complete the set up to commercial operations within the year.
“There will be mechanisms to set up to also make it happen real time. Those are two use cases, but there are others down the road. These will be t he priorities because we think these are the ones that have the most traction for retail payments system,” Espenilla said.
The BSP official noted that NRPS project aims to create a shared clearing and settlements system allowing banks to offer digital financial services in an inter-operable way.
“It means from one single account, you can do all of your transactions and deal with anyone. Unlike today, although there’s electronic banking today, they’re generally in silos, you transact within the ecosystem defined by the bank and its related companies. They don’t interact with one another. With this in place, you’ll be able to cross those barriers,” Espenilla emphasized.
With the NRPS in place, the BSP foresees a 20-percent increase in the use of electronic payments in the country by 2020.
Migrating the retail payments system to digital is critical to the Philippines, since 99 percent of paym ent transactions in the country are done in cash and only 1 percent through electronic systems, the BSP said.
“Remember our goal is to drive retail payments from 1 percent when we did a survey in 2014. We’re trying to drive that to 20 percent of total volume of transactions by 2020,” Espenilla said anew.
It is important to create of a payments management body or industry association that puts together big banks, small banks, and non-banks to set clearing standards for the industry, he said.
“Then they will be signing multilateral agreements that would allow them to transact with one another digitally. After signing of documents, you have to set up the structures,” he said.
The NRPS structure will be built on some of the existing systems like the Philippine Clearing House Corp. so it can move fairly quickly.
“Some of the structures are there. You just need to put in place agreements and enhancements to the existing technology. It’s a significant development to watch out for,” he added.