BSP issues standards on consumer redress mechanism for electronic fund transfers

​The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) approved on 30 May 2024 the issuance of Circular No. 1195 on the Consumer Redress Mechanism Standards for Account-to-Account Electronic Fund Transfers (EFTs) under the National Retail Payment System (NRPS) framework.

The Circular primarily focuses on the timely resolution of customer concerns relating to EFTs as this can build trust and confidence on the use of digital payments. It sets out industry-wide expectations on participating banks and electronic money issuers (EMIs) of the InstaPay and PESONet Automated Clearing Houses (ACH), and clearing switch operators (CSO), such as BancNet, Inc. and the Philippine Clearing House Corporation.

With this new regulatory issuance, the originating financial institution (OFI) shall notify the sender regarding the accurate status of EFTs. Periodic notification shall also be provided until resolution of the concern involving the EFT. Meanwhile, the receiving financial institution shall inform the beneficiary upon successful crediting of funds to the beneficiary account. In the notification message, all ACH participants shall adopt a common language that will enable customers to determine the actual status of the EFT.

The Circular also covers the required turnaround time for the OFI to return the funds to the sender's account for EFTs not received by the beneficiary.

For instant retail payments and corresponding use cases such as InstaPay, the funds must be returned to the sender's account within one hour from receipt of the customer's payment instruction.

For batch clearing like PESONet, the funds must be returned to the sender's account within two hours from receipt of clearing advice from the CSO. These periods are significantly shorter than the current response time of most participants which usually takes around two to three banking days. The return of funds to the sender shall include the fees collected by the OFI.

Meanwhile, to ensure prompt notification to end-users, the Circular requires ACH participants and the CSOs to define in their ACH operating guidelines the necessary actions from each party involved. This requirement covers both scheduled and unscheduled disruptions.

The policy likewise reiterates the need for the participants to adhere to BSP Circular No. 1160 (Financial Consumer Protection), specifically on the availability of 24x7 customer support assistance and on matters concerning erroneous and unauthorized transactions.

The Circular allows a transitory period to give ACH participants and CSOs time to make necessary preparations to ensure strict compliance with all the requirements by 01 January 2025.

The issuance of this Circular is aligned with the objectives of the NRPS framework of promoting a safe, efficient, and reliable payment system.

As of 30 April 2024, there are 86 InstaPay participants, while PESONet has 112 participants, consisting of digital banks, universal banks, commercial banks, thrift banks, rural banks, and non-bank EMIs. (BSP)