Most banks, e-wallet providers, and electronic money issuers (EMIs) have successfully aligned their operations with the Bangko Sentral ng Pilipinas (BSP) Circular No. 1238. The landmark regulation requires all electronic fund transfer fees to be reasonable, transparent, and directly tied to actual service costs.
In a recent radio interview, BSP deputy governor Mamerto Tangonan clarified that Circular 1238 does not order financial institutions to eliminate transfer charges completely. Public confusion arose after several major banks voluntarily waived their online transfer fees following the circular’s release, leading many consumers to assume the central bank had mandated free transfers across the board. Tangonan emphasized that the BSP’s primary objective is to guarantee fair pricing based on actual expenses, not to force zero-fee transactions.
Industry group Fintech Alliance.ph noted that traditional banks and digital financial services operate under fundamentally different business models. While banks can afford to absorb transfer fees by offsetting costs through revenue from loans, insurance, and interest, fintech firms and EMIs rely heavily on fee-based income to sustain their day-to-day operations.
Fintech Alliance.ph representative Lito Villanueva highlighted that transaction fees reflect far more than just payment switching. Each digital transfer incurs costs before, during, and after processing. Fees cover essential services including customer support, cloud infrastructure, SMS notifications, fraud screening, and continuous system upgrades required under the Anti-Financial Account Scamming Act. For fintech providers, fee revenues are also critical for funding continuous technology investments and extending financial access to unbanked communities in remote island barangays.
Beyond fee regulation, Circular 1238 introduces a simplified onboarding framework designed to expand the nation’s digital payment network. Under the new rules, low-risk micro-merchants—such as sari-sari stores and street vendors—can register to accept electronic payments using only a valid national ID. This removes traditional barriers to entry by eliminating the need for business permits, tax returns, or SEC registration.
