THE government is moving to slash digital transaction costs, with Finance Secretary Frederick Go saying fees could be brought down to as low as P2 amid broader push to make digital payments cheaper.
“My goal here is to bring down these P10, P20 or P50 [fees] down to maybe ... P5 or P2, something like that, [but] not zero because there’s a switching fee,” he told reporters on Tuesday.
Go said they wanted to address the high transaction fees levied on everyday digital payments, cross-bank transfers and overseas remittances that remain a significant burden.
“This has always bothered me — why in this day and age of digital transactions does it still cost that much to send money home,” he said.
Go said the government was working with the banking sector, regulators, and industry stakeholders to redesign parts of the country’s digital payments infrastructure to reduce costs.
Central to the plan is improving interoperability and addressing system constraints that make transfers more expensive when they are processed across different banks.
“I have been talking to the BAP (Bankers Association of the Philippines), [and the] Fintech Alliance because I always believe it’s about working with the stakeholders to figure out what needs to be done to achieve the objective,” Go said.
“And I think that the BSP (Bangko Sentral ng Pilipinas) of course has the same sentiment, how to bring down the consumption costs.”
He said one of the key inefficiencies was in the current settlement system, with banks required to maintain pre-funded accounts to ensure instant payments.
While this enables faster transactions, it also creates additional costs that are ultimately passed on to consumers.
And while transferring money within the same bank often comes with little to no fee, transfers to another bank typically incur charges.
“I think we want to level the playing field,” Go said.
The goal is not to eliminate fees entirely as a minimal “switching” or processing cost will still be necessary, but to significantly reduce them to a more affordable level.
“The objective is simple: digital payments should be fast, secure, convenient and affordable,” he said.
Early participation by a major financial institution could help create competitive pressure that encourages other players to follow suit.
“Normally, you just need one big player to lower fees, then others will have to compete,” Go said.