The Monetary Board approved the designation of PESONet and InstaPay as Prominently Important Payment Systems (PIPS) pursuant to the National Payment Systems Act (NPSA).
Under the Payment System Oversight Framework, PIPS refers to a payment system which may not trigger or transmit systemic risk, but could potentially cause adverse economic impacts or undermine the confidence of the public in the national payment system or in the circulation of money.
The designation of PESONet and InstaPay as PIPS would subject them to closer Bangko Sentral ng Pilipinas (BSP) supervision and monitoring to protect the public.
“The designation of PESONet and InstaPay as PIPS is considered timely, as these payment systems will facilitate the launch of other use cases for digital transactions, such as interoperable bills payments and direct debits,” said BSP Governor Felipe M. Medalla.
“This further promotes consumer welfare as we continue making progress toward the BSP’s objective of reaching 50 percent digital payments by 2023,” the Governor explained.
PESONet and InstaPay are digital payment schemes launched in 2017-2018 under the National Retail Payment System. Their usage grew significantly during the pandemic.
PESONet is a batch electronic fund transfer service and is a viable alternative for checks and recurring payments. InstaPay, on the other hand, is a real-time, low-value payment substitute for cash transactions.
PESONet and InstaPay are operated by the Philippine Clearing House Corporation and BancNet, Inc., respectively.
The two payment systems are expected to comply with international standards that foster safe, efficient, and reliable operations, particularly those provided under BSP Circular No. 1126 series of 2021.
Combined transactions using PESONet and InstaPay–the two interoperable platforms for electronic fund transfers–rose by 44 percent in terms of volume and 46 percent in terms of value as of end-December 2021 compared with 2020.
Volume and value of transactions using InstaPay–the platform of small-value transactions worth ₱50,000 and below–surpassed ATM withdrawals for the period January-December 2021. Volume and value of transactions using PESONet–the platform for bigger-value transactions–may approach check volume over time if itwill maintain its steady increase.
Over thesame period, the number of PESONetparticipants increased to 94 whileInstaPay reached 62 payment serviceproviders. The growth and diverseparticipation of banks, including thriftbanks and rural banks, as well as non-bank e-money issuers, indicate thewidening reach of interoperable digitalpayment services across differentregions and income classes in thecountry.
The PESONet Multiple Batch Settlement (PESONetMBS) was launched on 24 January 2022, adding another milestone in the BSP’s payment system development agenda.
With this service enhancement,PESONet users are able to receive funds at an earlier time than the usual end of banking day.”‹
For participating banks and e-money issuers, this allows better risk management as settlement of transactions are spread into two cycles within a banking day.
On the other hand, businesses benefit from shorter clearing intervals,which enable them to manage cashflows better.
By end-2021, PESONet transaction volume grew by 26 percent year-on-year from about 5.5 million to 7 million.
Familiarization with and wider use of digital payments made through PESONet and InstaPay gave impetus to other digital payment streams, such as the EGov Pay and QR Ph facilities.
