UnionBank Corporate Communication Team | June 30, 2017
UnionBank’s leadership recently spearheaded the signing of a formal agreement to establish the Payment System Management Body (PSMB) with major stakeholders in the industry, paving the way for the creation of two automated clearing houses that will process batch fund transfers and real-time credit across bank accounts and e-money wallets.
“The PSMB is a critical and unique entity that will serve as a strong foundation of a modern digital retail payment system in the Philippines.”
-Amando Tetangco Jr., BSP Governor
One of the clearing houses will process electronic fund transfers by batches, to be called PESO Net. It is eyed as the platform for big transactions and will serve as the alternative for checks.
BSP Deputy Governor Nestor A. Espenilla, Jr. said the central bank is targeting to course government transactions under the PESO Net, particularly for employee salaries, budget disbursements, and revenue collections. The BSP aims to raise the share of digital transactions in the country, eyeing to roll out the new system by end of September.
InstaPay is the other system that will process real-time credit for digital transactions valued at P50,000 or less. This service will be made available 24/7 across various financial players under the National Retail Payments System (NRPS) framework.
The NRPS, a BSP flagship program, aims to steer financial transactions gradually away from cash and check-based payments to electronic fund transfers and e-wallet disbursements. It also seeks to broaden financial inclusion by covering the unbanked and underserved areas through alternative and cheaper avenues for settlements.
BSP Governor Tetangco, Jr. said the new system will allow fund transfers even across different banks, doing away with the need to “open and manage several accounts” just to facilitate transactions.
The PSMB, composed of representatives from 70 banks and e-money issuers who signed the agreement, said they are confident in putting up the new payments systems by the third quarter of 2017, as they look to scale up existing platforms to make the necessary transition.
PESO Net will be built on the existing Philippine Clearing House Corp., while InstaPay will build on the current interbank network BancNet.
“The advantage there is you can leverage on the existing systems and technology currently being used to ensure that there’s minimal disruption in system and operations and just introduce new rules aligned with the NRPS framework,” said John Cary L. Ong, head of the PESO Net initiative, UnionBank Senior Vice President and Center Head of Transaction Banking.
UnionBank Chairman and CEO Dr. Justo A. Ortiz, in his capacity as the First Vice President of the Bankers Association of the Philippines (BAP), closed the event with an inspiring message. “The NRPS will make possible the vision of connecting Filipinos cheaply, conveniently, reliable, safely to a variety of payment platforms using leading edge technologies through a multitude of regulated participants with a wider breadth of channel and IoT device options, so that the public policy goal of financial inclusion can be achieved sooner and the fruits of our progress would be shared by all,” Ortiz said.
On behalf of the Bankers Association of the Philippines, he commended BSP Governor Tetangco, Deputy Governor Espenilla and their team members for providing the leadership, energy and persistent push and shove needed to keep the complex project moving forward with a myriad of participants.
“They say that a great day is coming when you go to sleep with a dream and wake up with a purpose. With the NRPS we started with a dream, and now we have a purpose.”
-Justo A. Ortiz, UnionBank Chairman and CEO
By being a part of the PSMB’s establishment, UnionBank plays an instrumental role in advancing the country’s electronic payments and transfers system, staying true to its commitment of connecting communities through smart banking.