Because of the limitations on travel during the epidemic, digital payments increased dramatically. However, some…
BSP encourages the creation of inclusive digital payments
As part of its resolve to move away from a cash-heavy economy, the Bangko Sentral ng Pilipinas (BSP) is further speeding the development of an inclusive digital payments landscape.
BSP Governor Felipe Medalla stated that it is critical to digitizing business payments as these make up 24.1% of all monthly retail payments in the nation during a seminar hosted by e-wallet giant GCash.
Although there has been development in this area, Medalla stated that businesses are lagging behind individuals and the government in the volume of digital payments they make (such as supplier payments and business salary payments).
Nearly 90% of all company payments, most of which are made through non-digital methods, are made to suppliers, according to the BSP.
The central bank has pledged to boost the proportion of Filipino adults with bank accounts to 70% by 2023 and to move 50% of all retail transactions to electronic channels under its Digital Payments Transformation Roadmap.
The COVID-19 pandemic acted as a stimulant, according to the most recent data, which revealed that the proportion of digital payments to all retail transactions increased from 20.1 percent in 2020 to 30.3 percent in 2021.
According to Medalla, the Philippines has improved financial inclusion while digitalizing retail payments.
With 96.7 percent of its total payment activities and disbursements currently in digital format, the government continues to be a leader in the digitalization process. 41.6 million of the 43.6 million payments the government made in total last year are already in digital format.
The majority of government payments, or 85.3% of the total volume, are made in the form of wages and salaries as well as social welfare payments such conditional cash transfers. These sub-use case payments are already 96.7 percent digital.
According to Medalla, the expansion of financial inclusion goes hand in hand with the development in retail payments digitalization.
According to the most recent Financial Inclusion Survey, the percentage of Filipino individuals with formal accounts will nearly double from 29 to 56 percent in 2021.
Government collections, which are currently 8.2 percent and 34.8 percent digital for payments made by individuals and corporations to the government, respectively, Medalla said there are chances to further digitalize government collections.
After former president Rodrigo Duterte issued Executive Order (EO) 170 encouraging the implementation of digital payments for government disbursements and collections, the BSP chairman sees increased digitalization of government disbursements and collections as one of its top goals.
Earlier projects include the Social Security System’s (SSS) use of PESONet to distribute pensions. the capability of using EGov Pay, InstaPay, and QR Ph for person-to-person and merchant-to-merchant payments as well as other duties to the government
According to Medalla, the BSP and the Philippine Payments Management Inc. (PPMI) plan to implement other programs in 2023, including bill payment, request to pay, and direct debit.
In order to progress payments digitalization, Medalla added, “the BSP stands solid in its commitment to establish an enabling legislative environment and explore collaborative relationships with national payment system stakeholders.”
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