Monetary Board approves BSP’s Digital Payments Transformation Roadmap

The policy-setting Monetary Board has given the green light to the Bangko Sentral ng Pilipinas’ (BSP) “Digital Payments Transformation Roadmap” for 2020 to 2023.

In a statement, the central bank said the roadmap charts the BSP’s current initiatives and strategy in advancing an “efficient, inclusive, safe, and secure digital payments ecosystem.”

“This shall support the achievement of the BSP’s mandates and meet the diverse needs and capabilities of individuals and firms,” it said.

The roadmap identifies two key strategic objectives.

“First, is the strengthening of customer preference for digital payments by converting 50% of the total volume of retail payments into digital form and expanding the number of the financially included to 70% of Filipino adults by onboarding them to the formal financial system through the use of payment or transaction accounts,” the BSP said.

“The second is the availability of more innovative digital financial products and services designed to be responsive to the needs of consumers, enabled by a digital ID (Philippine Identification System or PhilSys), and supported by the availability of a next generation payment and settlement system to facilitate real-time processing of financial transactions,” it added.

The roadmap also aims to develop digital payment streams, digital finance infrastructure, and digital governance standards.

The roadmap also recognized the broader challenges to the development of a digital payment ecosystem and financial inclusion, key among which is the state of access to and quality of internet connectivity, according to the BSP.

This challenge may be addressed by exploring the use of satellite communications technology in delivering internet connectivity to hard-to-reach rural places, it said.

“Our thrust to promote digitalization of payments is also strategically geared towards furthering financial inclusion as we view the two to be mutually reinforcing: They go hand in hand, with each one enabling the other,” Benjamin Diokno, chairman of the Monetary Board and governor of the BSP, said.

“With the launch of the Digital Payments Transformation Roadmap, we aim to hit two birds with one stone. We are securing the digitalization of payments, and increasing the number of Filipinos with access to financial services,” Diokno said.

Data from March 1 to 16 March and during the ECQ from March 17 to May 31, the BSP saw a significant decline in the volume and value of check payments and automated teller machine withdrawals, suggesting that consumers are wary of the risk of exposure brought about by face-to-face transactions in the bank.

Meanwhile, PESONet and InstaPay transactions increased by 74%, from 18.4 million before the COVID-19 lockdown (January 1 to March 16) to 32.1 million during the ECQ period.

At the same time, the 2019 Financial Inclusion Survey shows a notable increase in the number of e-money account owners from 1.3% of the adult population in 2017, to 8% in 2019.

“E-money providers have also reported record-high increases in their number of transactions and account users during the quarantine period, while latest data on the volume of transactions using PESONet and InstaPay manifest a sustained shift to digital payments demonstrating a substantial growth of 122% from 23 million to 51.2 million from the first to the second quarter of 2020,” the BSP said.

These developments indicate that there is a growing consumer sentiment to shift towards more digital payments, according to the central bank.

The BSP’s Digital Payments Transformation Roadmap supports this remarkable development by providing our key stakeholders, such as banks, financial and payment service providers, fintech service players, and consumers with a helpful strategic guide in navigating the country’s whole of nation approach towards a digital payment-enabled economy. — DVM, GMA News