Presented last March 14, 2016 at the Bangko Sentral ng Pilipinas to e-commerce industry players in the Philippines.

1. NATIONAL RETAIL PAYMENT SYSTEM &
Proposed Payment Systems Act
(House Bill No. 6197 & Senate Bill No. 3207)
Presentation to Payment Providers and other Stakeholders
The Lounge, BSP Executive Business Center
BSP Complex, Mabini, Manila
14 March 2016

2. I. National Retail Payment System (NRPS)
A. Rationale
B. What is NRPS and its Objectives
C. NRPS Vision
II. The Proposed Payment System Act (PSA)
A. Policy Objectives
B. Salient Features
AGENDA

3. I. NRPS(National Retail Payment System)

4. 36%
of the 1,634 cities and
municipalities do not have a
banking office
With at least one banking office
Unbanked
archipelagic barriers pose a big challenge
to financial access
of adults have an account at a
formal financial institution
31.3%
of adults had a loan in a formal
financial institution in the past year
11.8%
42%
68%
of the total number
of deposit accounts
of the total
amount of deposits
are concentrated in NCR
A. Rationale – Financial Access

5. • Of the 2.5 billion monthly transactions (volume) only
1% are electronic payments (BTCA)
• Only 30% have bank account, 3% with credit card and
13% a debit card (World Bank)
• Maintain multiple accounts with several banks
• Overwhelming use of checks and deployment of
manual processes to pay suppliers/creditors
• Small but formal businesses are not able to use checks
• Key barrier for electronic payments - limited level of
financial inclusion, intertwined with the sheer size of
the informal sector
A. Rationale – Current Situation

6. 2.5 Bn monthly transactions only
1% are made via electronic
means *
• ATMs used mainly for cash
withdrawals
• Mobile money served as cash
servicing through agents
Limited interoperability among
Payment Service Providers
• Limited interbank fund transfer
• High cost of moving funds
• Slow flow of funds
• Lower productivity
Electronic access to Interbank
Fund Transfer facility is not
generally available
A. Rationale - Challenges
* BTCA study 2013/2014
Low adoption of e-payments
B2B, B2G, B2P P2B, P2G, P2P

7. NRPS
A policy and regulatory framework
which aims to establish a safe,
efficient, reliable and affordable
retail payment system in the
Philippines
* Enables effective and efficient interface
and interoperability among players
* Fosters innovation and new business
models
* Facilitates the provision of a wide range
of products and services with needed
certainty, affordability and trust
*Ensures transparency
B. The National Retail Payment System (NRPS)

8. Goods and Services
Remittances
Debits and Other
Credits
Proceeds of Loans
and Investments
(interests)
Bills Payments
Taxes and Licenses
Electronic Fund
Transfers
Salaries,
Allowances,
Commissions
-11h -10h -09h -08h -07h -06h -05h -04h -03h -02h - +01h +02h +03h +04h +05h +06h +07h +08h +09h +10h +
NRPS
C. NRPS Vision

9. Current E-Payment System

10. CLEARING
1 Instruct to pay
merchant/recipient,
net of tax
2 Forward
instruction
SENDING
INSTITUTION
SENDER
6 Settlement
3 Route message to
Receiving FI
4 Credit to
account
5 Submit net clearing results
for settlement
RECEIVING
INSTITUTION
RECIPIENT
6 Settlement
BSP
Settlement
C. NRPS Vision – Electronic Payment

11. 1
FI credits
Account of
Client
2
Client has option to
pay for goods
electronically via
any digital device
3
Client
instructs
his/her bank
to pay
Merchant
6
Merchant releases goods to
Client
4
Client’s bank
transfers fund to
Merchant’s bank
account
5
Bank notifies
Merchant
that account
was credited
E
Merchant instructs bank
to pay amount to
Distributor’s bank
A. Shop orders supplies from
Distributor
B. Distributor sends Sales Invoice to
Merchant
F
Merchant’s bank transfers fund
to Distributor’s bank account
G
Bank
notifies
Distributor
that
account
was
credited
C. NRPS Vision – Increase Access to Finance
Client
Merchant
Distributor

12. II. Proposed PSA
(Proposed Payment Systems Act)
 House Bill No. 6197
- Sponsor: Rep. Sonny Collantes
- Passed Third Reading (Sixteenth Congress)
 Senate Bill No. 3207
- Sponsor: Sen. Bam Aquino
- Pending at the Senate Committee level

13. Policy Objectives
Safe, efficient and reliable
payment systems
Stability and
effectiveness of
monetary and
financial system
Control
systemic
risk
Sustainable
economic
growth

14. Salient features
Roles of BSP
Oversight
Supervision
and Regulation
Enforcement
Designation of
payment
systems
Criteria
Effects
Payment
System
Management
Body
Members =
participants
Self-regulating
Enforce rules
Operations of
payment
systems
Responsibilities
of participants
Finality and
Netting

15. Q & A