Why Can't Bangko Sentral Require Banks to Make Transfers Free?

The Bangko Sentral ng Pilipinas can only use "moral suasion" under current systems to convince banks to waive transfer fees during the pandemic, Governor Benjamin Diokno said Monday. Charging consumers for transfers to other banks is part of their business, he said.

As of Monday, 31 banks have agreed to waive inter-bank transfer fees (some up to P50 per transaction) until Dec. 31, Diokno told ANC's Market Edge. The list excludes the country's largest lender, BDO Unibank and Ayala-owned BPI.

Diokno said electronic wallet platforms GCash and PayMaya agreed to waive fees until Oct. 31.

ALSO READ:
These Banks Extended Free Money Transfers to Dec. 31
GCash Transfer Fees Moved to Nov. 1 in Relief to Users

"We're doing that, but it's more of moral suasion. Many of them have responded," Diokno said, when asked if the BSP would require banks to make transfers free. "We cannot impose on them to waive their fees because that's part of their business."

Consumers who pay inter-bank transfer charges can look at it as the cost of "convenience," Diokno said. It covers the cost of going to the bank to do the transaction in person.

Diokno said stay-at-home orders during the COVID-19 quarantine will accelerate the Philippines-shift to cashless. By 2022, all transactions in the country would be done digitally, one year ahead of the original 2023 projection.

The transfer fees cover the use of InstaPay and PesoNet. These were waived at the start of the COVID-19 quarantines in March to provide some relief to consumers.

InstaPay, as the name implies, allows instant fund transfers between banks and financial institutions for amounts no bigger than P50,000. This is ideal for online shopping. Fees run up to P50.

PesoNet on the other hand is for amounts higher than P50,000 and the transfer is cleared the next day. Here's a video explainer from the Bangko Sentral.