Consumers should not expect all digital fund transfers to become free, with the country’s fintech industry saying transaction fees remain necessary to keep electronic payments secure and sustainable despite the Bangko Sentral ng Pilipinas’ (BSP) new pricing rules.

Fintech Alliance.ph Chairman Lito Villanueva said Tuesday most banks and electronic money issuers (EMIs) have complied with BSP Circular 1238, but stressed that not all providers can sustain zero-fee transfers because their business models differ.

Banks can absorb waived transfer fees because they earn from lending, insurance and other revenue streams, while EMIs or e-wallets and fintech firms rely more heavily on fee-based income to fund operations and expand services to underserved communities, including remote island barangays, he said.

Villanueva said electronic fund transfers involve costs beyond payment switching, including customer authentication, fraud screening, compliance checks, settlement, customer support, cybersecurity, cloud infrastructure, and technology upgrades.

“Fraudsters are already one or two steps ahead of us. So if they are upgrading their methods, we have to stay two or three steps ahead of them through continuous updates. None of these upgrades come for free. That’s why we have to invest,” he said.

In a separate public interview, BSP Deputy Governor Mamerto Tangonan said the central bank issued the clarification after several major banks voluntarily waived online transfer fees, creating the impression that zero-fee transfers had become mandatory.

“There is a misconception that Circular 1238 mandates banks and e-wallets to reduce transfer fees to zero. That is not the case,” Tangonan said. “If you read Circular 1238, it simply says that the fees should be reasonable.”

Apart from introducing a cost-based pricing framework, Circular 1238 also simplifies merchant onboarding by allowing low-risk businesses, such as sari-sari stores and street vendors, to register using only a national ID to expand digital payment acceptance nationwide.