The debate over digital payment fees has gained attention as more banks, digital banks and fintech companies move toward free or reduced-cost fund transfers. At the center of this discussion is the Bangko Sentral ng Pilipinas (BSP) and its Circular 1238, which sets a cost-based framework for electronic fund transfer fees.
The circular does not require banks and electronic money issuers (EMIs) to permanently remove transfer fees. Instead, it requires financial institutions to ensure that their charges are reasonable, transparent, and supported by the actual costs of providing the service.
Institutions are also expected to submit a breakdown explaining how their transfer fees are determined. This means that a transfer fee may still be charged, provided the financial institution can justify the amount based on the costs involved in processing the transaction.
The approach comes as some major banks have already chosen to waive transfer fees.
While these moves can provide immediate savings for customers, the bigger policy question is whether zero fees should become the standard for every financial provider, regardless of differences in size, business model and operating costs.
The BSP’s framework instead seeks to balance affordability with the need for financial institutions to maintain secure, reliable and sustainable payment systems.
Digital Finance Industry Backs a Cost-Based Approach
Digital banks and fintech companies have supported the BSP’s cost-based approach, arguing that making digital payments affordable should not come at the expense of security, customer protection, and operational reliability.
The Digital Bank Association of the Philippines (DiBA PH) said BSP Circular No. 1238 does not require zero fees but instead adopts a cost-based pricing framework for electronic fund transfers.
“This provides greater regulatory certainty for digital banks as they continue investing in secure payments, savings, responsible credit and other digital financial services that deepen financial inclusion,” the group said.
“DiBA supports the BSP’s balanced approach, recognizing that affordability, consumer protection, innovation and long-term sustainability go hand in hand in building a resilient and competitive digital banking ecosystem,” it added.
Fintech Alliance Philippines founding chairman Lito Villanueva similarly emphasized that the industry supports making digital payments more affordable, but said the circular is designed around the actual cost of providing the service.
“Of course, this is a good initiative of the BSP in making digital payments affordable,” Villanueva said. However, he said the BSP circular is “more focused on a cost-based over a zero-based framework.”
“It’s more about having to ensure that affordability plus security are actually together,” he told reporters.
Villanueva explained that the cost of a digital transaction can involve more than the industry switch fee. Settlement, clearing, customer service, and dispute handling can also form part of the cost, particularly when a transaction involves different financial institutions.
He also pointed out that free transfers do not mean that financial institutions no longer spend money to process them. Providers that waive fees may instead rely on other sources of income, such as deeper customer engagement and the sale of other financial products.
For digital finance to remain dependable, providers must continue investing in cybersecurity, fraud prevention, technology, and customer support. Affordability therefore needs to be considered together with the quality and safety of the service.
Why Competition, Not Just Free Transfers, Matters
What has made digital financial services more affordable for ordinary Filipinos?
For many consumers, sending money has become significantly easier and cheaper because banks, e-wallets, remittance companies, and fintech platforms compete with one another. What once required a trip to a physical branch can now be completed through a mobile phone within seconds.
This competition has encouraged providers to introduce lower fees, faster transactions, and more convenient services.
In this sense, consumer protection is not simply about finding one provider that offers a free transaction. It is also about maintaining an environment where several providers compete for customers.
It argues that a healthy mix of financial providers has helped bring down costs while improving services. Banks, EMIs, remittance applications and other financial technology companies operate under different business models, but their competition gives consumers more options.
That variety is important because consumers do not all have the same financial needs. Some may prioritize free transfers, while others may value low-cost remittances, accessible cash-in and cash-out services, payment options, customer support or access to other financial products.
Barbie Dapul, chief operating officer of G-Xchange Inc., emphasized the importance of trust in digital finance.
“Financial inclusion is meaningful only when people trust the system. Every secure transaction, every fraud prevented, every customer concern resolved and every innovation introduced reflects continuous investment in protecting consumers.”
Her point highlights an important part of the debate. Financial inclusion should not be measured only by the number of accounts opened or the price of a single transaction. It should also consider whether people can rely on the services they use every day.
The Risk of Making Zero Fees the Industry Standard
While zero-fee transfers may be attractive to consumers, making them the expected standard across the entire industry could create challenges for smaller financial providers.
Traditional banks and EMIs do not necessarily generate revenue in the same way. Banks can earn deposits, lending, and other financial products, which may allow them to absorb the cost of selected services.
EMIs, on the other hand, are primarily focused on electronic money and payment services and operate under different regulatory and business constraints.
This difference matters when comparing the cost structures of large banks with smaller financial technology companies. If every provider is expected to match the pricing of the largest and most diversified institutions, smaller companies may find it harder to compete.
Instead of encouraging more competition, excessive pressure to maintain zero fees could eventually push some providers to reduce services, stop offering certain products, or leave the market. This could ultimately reduce consumer choice.
Angelo Madrid, president and CEO of Maya Bank, said sustainable competition depends on recognizing the different roles and obligations of financial institutions.
“A progressive regulatory environment encourages innovation while recognizing that different institutions contribute to financial inclusion in different ways. The objective is a level playing field that benefits consumers and strengthens the financial system.”
The primary goal, therefore, should not be to protect any particular provider. It should be to maintain a competitive financial ecosystem where companies have the ability to innovate while consumers continue to benefit from reasonable prices, reliable services, and multiple choices.
DOPAY: More Than an E-Wallet
DOPAY, operated by WIBS PHP Inc., is regulated by the BSP as an Electronic Money Issuer (EMI) and Virtual Asset Service Provider (VASP).
Its services include an e-wallet for payments and bill settlement, cash-in and cash-out facilities, fund transfers and remittances, including low-cost transfer options.
DOPAY also provides electronic cryptocurrency trading through its digital wallet.
For consumers, platforms such as DOPAY illustrate why digital finance conversation should go beyond whether one transaction is free.
The wider value lies in having accessible, regulated and reliable financial services that give Filipinos more ways to pay, transfer, receive and manage their money.
Download the DOPAY app today!
