New pricing rules for electronic fund transfers took effect in the Philippines on July 4, requiring banks and other supervised financial institutions to support digital-payment fees with analysis of their actual costs.
Bangko Sentral ng Pilipinas Circular No. 1238 changes the pricing framework for transactions under the country’s National Retail Payment System. For person-to-person transfers, the rules say charges for transfers between institutions should not materially differ from charges within the same institution plus the switch cost directly attributable to routing the payment through a clearing network.
The change does not impose a single nationwide retail price for every transfer. Instead, it narrows the basis on which providers can justify a difference between an internal transfer and one sent to another institution. The central bank’s definition of switch cost covers the charge imposed by the clearing switch operator for each processed transaction.
Pricing must be tied to documented payment costs
Supervised institutions must adopt a policy explaining how electronic-payment fees are set, including quantitative support for the amount charged and any rationalization of the fee structure. The cost analysis must be available to the central bank for oversight.
The circular identifies payment-handling, authorization, clearing, settlement, security, fraud-prevention, technology, customer-support and allocated overhead costs among the categories that can inform the analysis. It also says electronic-payment service fees are expected to remain below the charges for manual or over-the-counter transactions, reflecting the lower-cost delivery channel.
For person-to-person electronic fund transfers, the recipient must receive the full amount credited to the account without charges or deductions. That requirement matters operationally for banks, electronic-money issuers and payment applications because it places fee collection at the sending side rather than allowing the delivered principal to be reduced.
The central bank also left room for differentiated pricing when supported by business and operational considerations. Providers therefore can continue to design tiered or segmented fee structures, but the framework says one end-user group should not unreasonably subsidize the cost of serving another.
InstaPay and PESONet providers get a new pricing boundary
A companion BSP memorandum lifts the moratorium on fee increases for InstaPay and PESONet at the same time as Circular No. 1238 takes effect. The memorandum describes the change as part of a pricing structure intended to reduce person-to-person transfer fees while preserving responsible pricing, market conduct, regulatory oversight and consumer protection.
That combination is more nuanced than a blanket fee freeze or a universal zero-fee mandate. Providers regain the ability to adjust prices, but those prices now sit inside a cost-based framework. GMA News reported before the effective date that BSP officials expected more institutions to waive interbank fees and estimated the network switch cost at 1.50 Philippine pesos. The official circular itself does not set 1.50 pesos as a universal fee; it requires each provider’s pricing to be supported by its costs and treats the attributable switch charge as the relevant difference for off-us transfers.
Merchant-acquiring controls also change
Circular No. 1238 also revises requirements for operators licensed to acquire merchants. It calls for risk-based merchant due diligence, identification and verification of merchants and beneficial owners, sanctions screening, transaction monitoring and investigation of potentially suspicious activity.
Merchant-acquiring fees must be reasonable, transparent, market-based and proportionate to service costs. For payment processors, the practical result is that pricing governance and merchant-risk governance now sit in the same regulatory update. Institutions will need evidence for both whom they onboard and how they price the payment services they provide.