BPI to Make Digital Transfers Free, Prompting Questions on Competitor Follow-Through

MANILA, Philippines – Bank of the Philippine Islands (BPI) is making interbank transfers through InstaPay and PESONet free starting Wednesday, July 1, as regulators push for lower digital transfer fees. BPI fund transfers to other banks and e-wallets through InstaPay and PESONet will be permanently free on the BPI app, BPI online banking, VYBE, BanKo, and BizKo. There is also no daily limit to the number of free InstaPay transfers. Previously, most BPI app users were charged P10 for InstaPay transactions and P50 for PESONet transfers. BPI said the zero-fee policy is expected to benefit more than 9.5 million enrolled users of the BPI app. “Making interbank transfers free is a meaningful step toward enabling our customers to move their money more freely, while strengthening adoption of secure and convenient digital banking,” BPI president and chief executive officer TG Limcaoco said in a press release on Monday, June 29. “We expect this to drive more frequent use of digital transfers as customers no longer have to factor in per-transaction costs.” The announcement comes days after the Bangko Sentral ng Pilipinas (BSP) lifted its nearly five-year moratorium on changes in InstaPay and PESONet fees. Under Circular No. 1238, the BSP is now pushing banks and e-wallet operators to adopt a “reasonable and fair, market-based pricing” for electronic fund transfers. The circular does not require all InstaPay and PESONet transfers to be free. But it says fees for transfers across banks, e-wallets, and other payment providers should not be materially different from fees within the same institution, except mainly to reflect the switch or network cost paid to process the transaction. “Transfers within one bank or e-wallet are often free. So any difference in pricing should mainly reflect fees paid to the network switch operator,” the BSP said in a press release on Sunday, June 28. BPI’s move is good news for consumers as it goes beyond what the BSP requires. Whether it becomes an industry turning point rests on how other large banks and e-wallets respond. The government has been pushing for lower transfer fees for some time. Finance Secretary Frederick Go has pushed for digital transfer fees to fall to as low as P2 to P5, while acknowledging that the goal may not necessarily be to eliminate all fees outright. “You just need one of the big players to drop. Then people have to compete,” Go earlier said, as reported by Inquirer.net. Now, the big players have begun to drop. The government has already used Land Bank of the Philippines to set a lower benchmark, with Landbank cutting its InstaPay transfer fee for individuals from P15 to P8 and giving customers one free InstaPay transfer per day for transactions worth P1,000 and below. BPI goes a step further by removing both InstaPay and PESONet fees on covered digital channels altogether. The issue for banks has always been who absorbs the cost. Digital transfer charges cover the network switch fee, clearing and settlement, cybersecurity, fraud monitoring, customer support, compliance, and the institution’s own technology infrastructure. In 2024, Limcaoco — then also head of the Bankers Association of the Philippines — said BPI’s own study showed that each interbank transfer cost the lender about P22. Back then, he had been hesitant to eliminate transfer fees without banks receiving incentives, such as cuts in their reserve requirement ratio, in exchange for offering zero interbank transfer fees. But with BPI now dropping its fees anyway, the door is open for a competitive race among banks to bring transfer fees down. – Rappler.com