PHILIPPINE BANKS have set up a self-governing body that will facilitate and monitor the clearing of electronic payments, parallel to efforts led by the central bank to spur more digital transactions in the country.
In a statement sent over the weekend, the Bankers Association of the Philippines (BAP) said they have established the Philippine Payments Management, Inc. (PPMI) which will stand as the “supporting body” for the Bangko Sentral ng Pilipinas (BSP) in setting up clearing houses for digital payments.
“PPMI will organize direct clearing participants into a self-governing body and assist the BSP in overseeing the development and operations of the retail payment system. It will help ensure that the country will soon have an interconnected electronic retail payment system,” BAP president Nestor V. Tan, who also heads BDO Unibank, Inc., was quoted as saying.
The PPMI registered with the Securities and Exchange Commission on Aug. 30.
In 2015, the BSP launched the National Retail Payment System (NRPS) with the goal of steering financial transactions gradually away from cash and checks towards electronic fund transfers and e-wallets.
With the greater volume of online payments, the central bank has tapped local banks and e-money issuers to set up clearing houses that will oversee these electronic transactions. As of March, the plan was to establish the PESO Net clearing house for high-value electronic fund transfers, and the InstaPay for real-time credit involving P50,000 or less.
The clearing houses should allow fund transfers within and across banks and financial firms.
A payment system management body composed of industry representatives — now called the PPMI — will oversee the two clearing houses, in coordination with the BSP.
BAP’s Mr. Tan said the PPMI will maintain a “competitive and responsive” playing field among service providers, and will recommend policies to the BSP to improve financial inclusion.
In a separate issuance, the BSP said it has required banks and credit card issuers to stop processing high-risk transactions if they have not yet complied with the Sept. 30 deadline which requires them to use a two-step verification process for online payments.
BSP Deputy Governor Chuchi G. Fonacier reminded banks and financial firms to “disable functionalities” that facilitate sensitive communications or high-risk transactions if they have not yet adopted protocols for multi-factor authentication.
The measure requires banks to verify a client’s identity using at least two different methods before one can proceed with high-value fund transfers or payments, as they seek to curb rising cases of card skimming and fraud.
Banks should also implement “acceptable interim or compensating controls” to improve cyber security protocol if they have not yet adopted the tighter standards. — Melissa Luz T. Lopez