BSP urges free service fee for small fund transfers

FINANCIAL INCLUSION. Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. (right) urges more banks to waive the fee for small-value transactions to encourage more Filipinos to use digital payments during a briefing at the sidelines of the 2023 Alliance for Financial Inclusion Global Policy Forum held Thursday (September 14, 2023) at the Philippine International Convention Center, Pasay City. With him is AFI Executive Director Alfred Hannig who said the alliance will help push for full financial inclusion. (PNA photo by Anna Leah Gonzales)

The Bangko Sentral ng Pilipinas plans to issue a payments framework aimed at removing transaction fees for small fund transfers.

BSP Governor Eli Remolona Jr. on Thursday said central bank officials have also been talking with e-wallet firms and other digital financial services providers to create the framework which will require financial firms to offer free fund transfers for small amounts.

He said only three major banks are offering such service so far amid the lack of formal guidelines and directive from the BSP.

Shame major banks

“We’re trying to shame other major banks into following the same service. We’re formalizing it through a payments framework, and we’re in touch with GCash, Maya and other digital financial services providers,” Remolona said Thursday during the Global Policy Forum on Financial Inclusion organized by the Alliance for Financial Inclusion at the Philippine International Convention Center in Pasay City.

With zero fees for small fund transfers, Remolona said more Filipinos would be encouraged to avail of banking services like deposit accounts, build wealth, and promote equitable financial service.

“In general, we want to make sure the poor do not subsidize the rich. If you have a credit card and a big spender, you can get rewards. Guess who pays for the rewards? It’s the poor guys who only use small amounts in their transactions and get charged,” the BSP governor said.

As more Filipinos own deposit accounts even with small funds, Remolona added banks and other lenders can strengthen their capital capacities.

“We’ve found that when deposits are small, they become sticky and depositors don’t run away at the first sign of trouble. If you can lend to the poor, you have a more diversified portfolio and so it’s safer for banks,” the BSP governor said.

Manila Manifesto

During the Global Policy Forum on Financial Inclusion attended by over 700 foreign bankers and other stakeholders, Remolona announced the Manila Manifesto.

This is a commitment by the Philippines to collaborate with other state-members of the Alliance for Financial Inclusion or AFI on developing global standards for making financial products and services safe, accessible and affordable for all.

AFI reported 1.4 billion people worldwide still cannot access financial services due to a range of factors, such as financial illiteracy and lack of Internet connection and digital banking platforms.

“In the 15 years since AFI was created, with substantive support from the BSP, our members have brought over 840 million people into the financial system via enlightened national policies and strategies on financial inclusion,” Dr. Alfred Hannig, AFI executive director, said.

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