THE Monetary Board has approved the Bangko Sentral ng Pilipinas (BSP) Digital Payments Transformation Roadmap 2020-2023, which charts the BSP’s current initiatives and strategy in advancing an efficient, inclusive, safe and secure digital payments ecosystem.
The roadmap is said to support the achievement of the BSP’s mandates and meet the diverse needs and capabilities of individuals and firms. It identified two key strategic objectives.
First, is the strengthening of customer preference for digital payments by converting 50 percent of the total volume of retail payments into digital form and expanding the number of the financially included to 70 percent of Filipino adults by onboarding them to the formal financial system through the use of payment or transaction accounts.
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.
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. This challenge may be addressed by exploring the use of satellite communications technology in delivering internet connectivity to hard-to-reach rural places.
“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,” said BSP Gov. and Monetary Board chairman Benjamin Diokno.
The momentum for pursuing digital payments has also been catalyzed by the recent lockdowns brought about by the Covid-19 pandemic.
Sustained shift to digital
Comparing data from March 1 to 16, 2020 and during the enhanced community quarantine (ECQ) from March 17 to 31, a significant decline in the volume and value of check payments and automated teller machine withdrawals was observed, 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 remarkably increased by 74 percent, from 18.4 million prior to the Covid-19 lockdown (Jan. 1 to March 16) to 32.1 million during the ECQ (March 17 to May 31). At the same time, the 2019 Financial Inclusion Survey shows a notable increase in the number of e-money account owners from 1.3 percent of the adult population in 2017 to eight percent 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 percent from 23 million to 51.2 million from the first to the second quarter of 2020.
These developments indicate that there is a growing consumer sentiment to shift towards more digital payments, the BSP said. (PR)