E-wallets Defend P10 Transfer Fees Amidst Bank Waivers

MANILA, Philippines — The country’s umbrella group for digital banks has defended members that opted to keep transfer fees of at least P10, even as almost all other banks reduced theirs to zero. In a statement, Fintech Alliance PH chairman Lito Villanueva said it is difficult for e-wallets and electronic money transfers (EMIs) to remove transaction fees for fund transfers. The country’s largest banks can afford to eliminate transfer fees because they earn from a variety of revenue streams like lending and insurance. However, Villanueva said e-wallets and EMIs depend on fee-based revenues, especially transfer charges, to sustain the business. He added that e-wallets like GCash and Maya have introduced a quicker way of transferring money, and this system requires infrastructure investments. Villanueva said fund transfers entail costs before, during and after an amount is moved digitally. E-wallets invest in compliance checks, customer authentication and fraud screening to build up the integrity and security of their platforms. As such, Villanueva said the transaction fees reflect both the switching costs – used to maintain the actual system for money movement – and infrastructure costs for customer support. E-wallets use part of the transfer fees to bankroll their cybersecurity upgrades as required under the Anti-Financial Account Scamming Act and telco expenses, especially cloud storage and text notifications. Without the transfer fees, Villanueva said it would be difficult for e-wallets to fund cybersecurity initiatives to stay ahead of scammers, who always come up with new schemes. Under the BSP’s Circular 1238, banks were told to comply with a pricing mechanism designed to make fund transfers cost-based. Although the country’s largest banks abolished transfer fees, e-wallets like GCash and Maya kept a P10-per-transaction charge, still a reduction from the previous P15.