BSP promotes payment use cases in strategic sectors

The Central Bank of the Philippines (BSP) is considering implementing a national Quick Response Code (QR) system for strategic sectors through payment service providers (PSPs) without charging any fees.

In the draft circular, the BSP intends to introduce strategic payment use cases — national QR codes, QR Ph — for strategic sectors such as transportation, which will be serviced by payment service providers without charging interbank fees to consumers and merchants.

The BSP said the national QR code standard will be established through a joint venture in which the Payment System Management Body (PSMB) will take the lead in consultations involving payment service providers, payment system operators and Automated Clearing House (ACH) participants.

Philippine Payments Management Inc. (PPMI) is a PSMB in the Philippines. Meanwhile, PSPs are entities that provide payment and financial services to end users, such as banks and non-bank e-money issuers.

The BSP stated that payment service providers must ensure that payment and financial services using QR codes are treated appropriately when determining applicable fees.

Payment service providers must also ensure that threats and vulnerabilities arising from payment and financial services using QR codes are appropriately identified, measured, monitored and controlled.

In addition, the BSP also intends to include strategic payment use cases in the Manual of Regulations on Payment Systems (Morps) to facilitate the flow of funds and enable financial transactions within the economy.

“To support national development goals, foster financial inclusion, stimulate economic activity, and align with regulatory goals for a safe, efficient, reliable, and secure payments ecosystem, the Bangko Sentral calls for the active participation of PSPs in strategic payment use cases,” the BSP said in a policy statement.

A payment use case will be considered strategic if it supports the achievement of goals set out in national development plans and strategies, with particular emphasis on increasing financial inclusion and modernizing key sectors of the national economy, the BSP said.

BSP will consider impact, accessibility and inclusiveness when identifying strategic payment use cases.

The BSP stated that strategic payment use cases must also be interoperable, compliant with the principles set out in Section 201 of the National Retail Payments System (NRPS) Framework, and created independently and separately from existing payment use cases.

“Interoperable payment use cases that have already been established under the NRPS and are currently operational cannot be converted into a strategic payment use case,” the BSP noted.

As BSP added, the PSMB must ensure the effective design and enforcement of rules, policies, procedures and/or standards for the operationalization of strategic payment use cases.

This includes, but is not limited to, the rules, policies, procedures and/or standards applicable to the acceptance of payment service providers, the withdrawal of participating payment service providers and the termination of a strategic payments use case.

“While participation in the strategic payments use case is not mandatory, payment service providers are encouraged to align and participate in collective societal efforts to achieve the country’s development goals, significantly increase financial inclusion and continuously stimulate economic activity, while remaining consistent with the BSP’s goals of safe, efficient, reliable and secure payment systems,” the BSP said.