BSP offers free QR payments for “strategic” sectors

The Bankko Sentral ng Pilipinas (BSP) proposes the adoption of free strategic payment use cases such as the national QR code and QR Ph standard for the transportation sector and other key sectors.

In a draft circular currently being circulated among banking and payments industry players, the BSP wants to implement payment use cases that will be handled by payment service providers (PSPs) “free of charge, including interbank fees, or free of charge to end-users.”

End users in this case are consumers and merchants. PSPs are entities that provide payment services to end users, which also include bill issuers and government institutions.

The rationale, according to the proposed circular, is that payment service providers play a “critical role in facilitating the flow of funds and enabling financial transactions in the economy” and therefore making them free “supports the country’s development goals, fosters financial inclusion, stimulates economic activity and is consistent with the regulatory objectives of a safe, efficient, reliable and secure payments ecosystem.”

BSP strongly encourages “active participation of PSPs in strategic payment use cases” and the use of QR codes. QR technology is one of the “most convenient ways to make payments” because it only requires the use of smartphones or tablets to scan QR codes to make payments.

The deadline for submitting comments on the draft circular is August 16. The BSP wants all suggestions from the payments sector to be submitted by then.

Now, with the draft circular, the BSP is revising the characteristics of a strategic payment use case. It defines a “use case” as “how users interact with and use systems, methods, or processes to achieve a specific goal.”

When it comes to a payment use case, it is a use case for a payment service, such as a person-to-merchant (P2M) payment or a business-to-government (B2G) payment.

Meanwhile, the BSP describes a case of strategic use of payments as payments covered by the provisions of Republic Act No. 11127 or the National Payment System Act.

The BSP will consider a payments use case to be strategic when it supports the objectives of national development plans and strategies. This is particularly true for use cases that have a “specific focus on increasing financial inclusion and modernizing key sectors of the national economy, ultimately fostering the country’s sustainable economic growth.”

The BSP said it will also consider impact, accessibility and inclusiveness when identifying strategic use cases for payments.

In particular, the BSP will consider its impact on economic growth, social development and public well-being, contributing to broader societal goals and priorities; its accessibility as an essential resource, good or service, where digitalisation provides improved access to such resources, goods or services, making them more convenient and accessible to a wider range of people or communities; and inclusiveness, where it meets the needs of diverse populations, including those in remote or underserved areas, and ensures equitable access to benefits.

One of the key features of the strategic payments use case, the BSP said, is that it will be offered to end users free of charge, including interbank fees, or at no cost.

“Bangko Sentral will continuously explore the possibility of offering incentives on a case-by-case basis, depending on the level of PSP participation in this initiative. These incentives may include, but are not limited to, exemption from or reduction of supervisory and operational fees, public recognition and publicity,” the draft circular stated.

It added, however, that 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.”