The Market Monitor Minding the Nation's Business
By Rose de la Cruz
Given the relative newness of digital banking, esp. fund transfers in the country, hitches like delayed reporting or confirmation or constant downtime in connectivity among banks and financial institutions (FIs) are to be expected. So, because of mounting complaints among bank clients, the Bangko Sentral ng Pilipinas was forced to intervene and Issue a circular to guide all concerned.
The BSP circular covers how banks and FIs should address consumer concerns on electronic fund transfers.
Circular No. 1195 states that the originating financial institution (OFI) shall notify the sender regarding the accurate status of the electronic fund transfer.
The receiving financial institution shall also inform the beneficiary upon successful crediting of funds to the beneficiary account.
The circular said that automated clearing houses must adopt a common language that will enable customers to determine the actual status of the fund transfers, and notify users regularly until the concern is resolved.
The use of electronic payments continues to expand and is expected to steadily grow. With the increased adoption of digital payment services, the BSP recognizes the need to ensure that BSP-Supervised Institutions (BSIs) that offer electronic fund transfers (EFTs) through their participation in the Automated Clearing House/s (ACH) provide appropriate and timely consumer recourse mechanisms on issues lodged by consumers’ Defined industry-wide actions and expectations on clearing switch operators (CSOs) and ACH participants for the timely resolution of consumer concerns relating to EFTs build trust and confidence in the use of digital payments.
Both OFl (originating financial institution) and the RFI (receiving financial institution)! must include relevant transaction details that will allow both sender and beneficiary to easily identify the EFT. Common language must be observed by all ACH participants in the notification message, particularly in relaying the actual status of the EFT b. Return of Funds.
Correspondingly, the ACH (automated clearing house) operating guidelines must clearly define the following guidelines on notifications: (1) The OFl shall timely provide notification to inform the sender about the accurate status of the EFT(electronic fund transfer). Subsequent notifications must likewise be provided for updates or resolution, (2) The RFl shall timely provide notification to the beneficiary about the funds received in the beneficiary account.
The circular covers banks and electronic money issuers of the InstaPay and PESONet automated clearing houses, and clearing switch operators such as BancNet, Inc. and the Philippine Clearing House Corporation.
The BSP said timely resolution of customer concerns on electronic fund transfers can build trust and confidence on the use of digital payments.
The BSP was aiming to raise the share of digital payments in retail transactions to 50 percent for 2023 in line with its Digital Payments Transformation Roadmap.