Small and medium-scale enterprises (SMEs) stand to gain several benefits if they digitalize their payment processing, among them increased business efficiency and lower expenses, according to a central bank official.
Anne Michelle Andres, Bank Officer V for payments policy and development at the Bangko Sentral ng Pilipinas (BSP), encourages SMEs to go digital with their payment processes, noting: “For businesses, efficiency is improved through reduced operating cost.”
Andres in a recent webinar said that a survey by payment card service provider Visa in 100 cities worldwide found that digital payments can generate net benefits for businesses of nearly USD500 billion a year, savings that can be channeled to more productive uses and business expansion.
“For our MSEs, digital payments can improve their participation in e-commerce and improve supply chain management. And with the increased use of financial services, MSMEs are able to build their digital footprint that can enhance their credit history and then ultimately can expand their access to working capital via digital means,” said Andres in the online forum.
Andres said account ownership and digital payments adoption have been rising among Filipino consumers. Account ownership rose from 29% or 20.9 million Filipinos in 2019 to 56% or 42.9 million in 2021, while digital payments as a share of total payments grew in volume from 1% in 2013 to 42.1% in 2022.
SMEs can use the electronic funds transfer facilities PESONet and InstaPay to make financial transactions, reminded the official.
PESONet can be utilized for government payments and collections, supplier payments, and payroll, while InstaPay can be used for domestic remittance, e-commerce, bills payment, and other immediate low-value payments.
Additionally, SMEs can also use the eGov Pay, an electronic payment facility under PESONet, to pay taxes, permits, fees and other obligations to the government using the Link.Biz Portal of the LandBank.
And under InstaPay, there are two additional e-payment facilities: Bills Pay Ph and QR Ph.
Bills Pay Ph is a new facility that allows customers to pay their bills for utility, rent, subscription, credit cards, loan amortizations and other periodic or recurring financial obligations by either scanning or uploading the QR Ph Person-to-Biller (P2B) code or by manually inputting the payment details for the non-QR mode of payment.
QR Ph, on the other hand, features QR Ph P2P for person-to-person funds transfer and remittance and QR Ph P2M (person-to-merchant) for the purchase of goods and services.
Andres said that to avail of all these interoperable digital payment facilities, consumers need not download a separate application from Google Store or Apple Store.
“You can just open your mobile app and access your internet banking provided by your bank,” she said.
Meanwhile, BSP is set to launch more innovative payment streams to support the digital transformation of the Philippines, said the banker. Among these are development initiatives for retail payments and large-value payments.
Initiatives for retail payments cover the request to pay facility, direct debit, and cross border payments. The request to pay facility will empower payees to initiate collections by sending a request to pay and the payers just need to authorize the collection, and is ideal for those who are too shy to collect payment from others.
Direct debit will allow customers to better manage their recurring payments such as monthly rentals, loan amortizations and payment of insurance premiums by authorizing billers to pull funds from the account of the payers.
For cross-border payments, “there are initiatives now to link InstaPay fast payment to other ASEAN nations,” said Andres.
Among the initiatives for large-value payments in the pipeline is the Project CBDCPh (Central Bank Digital Currency Ph).
Andres reminds those wishing to use these digital payment facilities to open and maintain a transaction account first, which could be either a basic bank account, which targets the unbanked and underbanked, or an e-money account.
