MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) said banks should make fund transfer available through their electronic channels starting Nov. 30 to meet the government’s target of increasing the level of cashless transactions to 20 percent by 2020 from only one percent.

BSP Deputy Governor Chuchi Fonacier issued Memorandum M-2018-026 stating BSP supervised financial institutions offering electronic financial and payment services such as electronic banking should make fund transfer via PESONet (Philippine EFT System and Operations Network) and InstaPay available through internet and mobile phones by Nov. 30.

Both automated clearing houses (ACHs) were launched as part of the National Retail Payments System (NRPS) aimed at establishing a safe, efficient, affordable, and reliable e-payments system.

The PESONet involves the fund transfer from one account (payer) to one or several accounts (payees) maintained in different banks. The fund transfer or payment instructions are processed in bulk and cleared at batch intervals.

On the other hand, InstaPay allows customers to transfer peso funds almost instantly between accounts of participating banks. The service is available 24/7, all year round.

Fonacier said the fund transfer confirmation of the banks to their client-sender should clearly indicate whether the fund transfer is made via PESONet or InstaPay to set proper expectation on the availability of funds to the beneficiaries in accordance with the prescribed turn-around time.

According to Fonacier, banks are further required to notify the BSP Payment System Oversight Department (PSOD) within 10 banking days from the date it has made PESONet or InstaPay available on its e-channels.

Fonacier said the Philippine Payments Management Inc. (PPMI) is tasked to monitor and lead its members towards compliance with the NRPS framework.

She warned non-compliance with the deadline would subject the banks and financial institutions to applicable sanctions and other enforcement actions that may be imposed by the BSP.

BSP Governor Nestor Espenilla Jr. is confident of meeting and even exceeding the target of increasing the share of cashless transactions to 20 percent by 2020.

Espenilla said stakeholders are pursuing the digitalization of government transactions including the payment of the salaries of state employees.

“The government actually has many transactions even with individuals. The government is paying salaries to teachers, police, and soldiers. So these can benefit from digitalization,” he said earlier.

He added the government also pays a lot of suppliers, social security premiums, dividends, taxes and fees that could be coursed through digital channels.

“Actually there is a lot of possibility. So once government is geared up to participate I don’t really look at it as a linear growth. It is not like three percent every year we are talking about maybe it its three percent or four percent now but it can immediately take off to the 10 or 20 percent once the bulk users come in,” Espenilla said.

The BSP chief pointed out the central bank is also targeting large consumer companies to reach the critical mass to shift to electronic payments.