What is InstaPay and PESONet Philippines?

In the past, while acquiring Bitcoins through popular crypto apps like Coins.ph and BuyBitcoin.ph has been convenient because of multiple cash-in partners, the convenience stops there. If you want to convert your Bitcoin back to pesos and cash it out, you are faced with limited choices. Sure, there’s LBC, there’s the crypto-friendly UnionBank, but beyond the pawnshops and OTCs, choices are lesser.

The option to transfer money from crypto apps to a bank is very limited. The problem does not lie with the crypto app not being a partner of the bank, but (the ongoing consensus amongst the people I talked to is) because the bank simply refused to become a partner of the crypto app. This is not without justification. The Bangko Sentral ng Pilipinas, before it switched tunes in 2017, required its supervised institutions to be wary of anything related to cryptocurrency. Of course, that has changed now. With Circular 944, a crypto company can obtain a license so that they can legally convert crypto to fiat and vice versa. Still, from sources I will not name, it seemed the banks still simply do not want to touch crypto despite the legal status of these virtual currency exchanges. In one press release, BSP said, “exercise due diligence when dealing with virtual currency exchanges”. The Central Bank did not say “do not engage”, but rather exercise “due diligence”. There is a difference.

Instapay and PESONet?

This month, mobile wallet Coins.ph announces that its users can now instantly cash out to banks (and non-banks) that are members of InstaPay. PDAX allows cash out to banks (and non-banks) that are participants of Instapay and PESONet. While we will not discuss the topic in its entirety, let’s look at why being a member of InstaPay and PESONet is convenient to users of crypto apps and exchanges in the Philippines.

Read More: [Summary] Cash In and Cash Out Fees of Crypto Exchanges/Wallets in the Philippines

What is the National Retail Payment System?

A government initiative with the BSP at the forefront, the National Retail Payment System (NRPS) promotes the interoperability of products and services of financial institutions with one another. Simply put, it requires financial institutions – banks, non-banks, e-money issuers, all BSP-supervised institutions – to make sure their users can effortlessly do funds transfer from one entity to another without much complexity, no more waiting for 3 – 5 banking days. In the most basic examples, it ensures that:

• I can transfer money from my BDO account to my UnionBank account;
• I can transfer money from my Coins.ph account to my BDO account;
• I can send money from my Gcash to my friend’s Paymaya account.

There are 2 Automated Clearing Houses (ACHs)* under  the NRPS:

PESONet

The Philippine EFT System and Operations Network (PESONet) is a batch electronic fund transfer (EFT) credit payment scheme. In this system, the fund transfers are processed in bulk and they are cleared in bank intervals. So if I transfer money to another person via PESONet, he will not receive it immediately, but at most – the sending and receiving is completed within hours or by end of the day because my transfer request is processed along with other requests in the network.

InstaPay

If PESONet transfers the money within the day, Instapay allows crediting of funds in real time up to Php 50,000 with a minimum transaction fee. Launched on April 23, 2018, Instapay is “designed for small value transfer of money or payments” like purchasing of goods, paying for tickets, online shopping, etc. Based on my experience, I transferred money from my UnionBank account number to my friend’s BPI account and my friend “almost” instantly received it.

NPRS intended that payment products be built on InstaPay so that merchants can accept electronic payments from both e-money and bank accounts without having the usual point-of-sale (POS) devices used for cards.

In Relation to Crypto Apps

Becoming part of InstaPay or PESONet is more of giving their users a method of electronic fund transfer among participating banks and non-banks. A BPI account holder can transfer to UnionBank seamlessly. A Gcash account can send money to a Paymaya account. These are things not possible when they were first launched, especially in the case of Gcash and Paymaya, owned by companies who are competing in other industries like telco. These are things also not possible before for Crypto apps, who, in the past, are shunned by banks.

Below this article is a list of participants for both PESONet and InstaPay. From that, we can infer that one requirement to be part of PESONet and/or InstaPay is to become a BSP-supervised institution. Well, companies that engage with the peso or electronic peso, whether a pawnshop or money changer or bank or e-wallet that stores electronic peso (that will be exchanged for other items**) are (or must be) a BSP-supervised entity. Crypto exchanges with Virtual Currency Exchange license are BSP-supervised entities. Of course, there are surely other (and more stringent requirements) to become a participant to InstaPay and PESONet. Not to mention the relationship between the exchange and the banks, becoming part of InstaPay and/or PesoPay will increase the ways as to which the users can cash out their money.

Of course, some will say that e-wallets, crypto apps, or even internet banking etc are meant for users who don’t have bank accounts or cannot transact with banks because of lack of identification or they cannot meet the bank’s minimum transaction amount. Still, the point of InstaPay and PESONet is to make it convenient to transfer money. If you can transfer directly to your bank account online, there is no need to go to the nearest pawnshop, remittance branch, etc to cash out. You just transfer it to your bank without leaving your house through mobile banking, or just plain online.

Now let’s be clear. What is being cashed out is pesos. Not Bitcoin. Not Ethereum. Etc.

List of PESONet Participants (as of October 2020):

Universal and Commercial Banks

1. Al-Amanah Islamic Investment Bank of the Philippines
2. Asia United Bank Corporation
3. Australia and New Zealand Banking Group Limited
4. Bangkok Bank Public Co. Ltd.
5. Bank of America, N.A
6. Bank of China Ltd. – Manila Branch
7. Bank of Commerce
8. Bank of the Philippine Islands
9. BDO Unibank, Inc.
10. Cathay United Bank Co., Ltd.
11. China Banking Corporation
12. CIMB Bank Philippines, Inc.
13. Citibank, N.A.
14. CTBC Bank (Philippines) Corporation
15. Deutsche Bank AG
16. Development Bank of the Philippines
17. East West Banking Corporation
18. Industrial and Commercial Bank of China, Ltd. – Manila Branch
19. Industrial Bank of Korea Manila Branch
20. ING Bank, N.V
21. JP Morgan Chase Bank, N.A.
22. KEB Hana Bank – Manila Branch
23. Land Bank of the Philippines
24. Maybank Philippines, Inc.
25. Mega International Commercial Bank Co., Ltd.
26. Metropolitan Bank and Trust Company
27. Mizuho Bank, Ltd. – Manila Branch
28. MUFG Bannk, Ltd.
29. Philippine Bank of Communications
30. Philippine National Bank
31. Philippine Trust Company
32. Philippine Veterans Bank
33. Rizal Commercial Banking Corporation
34. Robinsons Bank Corporation
35. Security Bank Corporation
36. Shinhan Bank – Manila Branch
37. Standard Chartered Bank
38. Sumitomo Mitsui Banking Corporation – Manila Branch
39. The Hongkong and Shanghai Banking Corporation (HSBC)
40. Union Bank of the Philippines
41. United Coconut Planters Bank
42. Unted Overseas Bank Limited, Manila Branch

Thrift Banks

1. AllBank, Inc.
2. Bangko Kabayan, Inc
3. Bank of Makati, Inc.
4. China Bank Savings, Inc.
5. Dumaguete City Devevelopment Bank, Inc.
6. Equicom Savings Bank, Inc.
7. First Consolidated Bank, Inc.
8. HSBC Savings Bank, Inc.
9. Malayan Bank Savings and Mortgage Bank, Inc.
10. Philippine Business Bank, Inc.
11. Philippine Savings Bank
12. Producers Savings Bank Corporation
13. Queen City Development Bank
14. Sterling Bank of Asia, Inc.
15. Wealth Development Bank Corporation
16. Yuanta Savings Bank Philippines, Inc.

Rural Banks

1. Bangko Mabuhay, Inc
2. Banghko Nuestra Senora del Pilar, Inc.
3. Bank of Florida, Inc.
4. BDO Network Bank, Inc.
5. Camalig Bank, Inc.
6. Cantilan Bank, Inc
7. Cebuana Lhuillier Rural Bank, Inc.
8. Community Rural Bank of Romblon
9. Country Builders Bank, Inc.
10. Dungganon Bank, Inc.
11. East West Rural Bank, Inc.
12. Guagua Rural Bank, Inc
13. Innovative Rural Bank, Inc.
14. Laguna Prestige Banking Corporation
15. MVSM Bank (Rural Bank), Inc.
16. Rang-Ay Bank, Inc.
17. RBT Bank, Inc.
18. Rural Bank of Digos, Inc.
19. Rural Bank of Guinobatan, Inc.
20. Rural Bank of Rosario (LU), Inc.
21. Tonik Digital Bank, Inc.

Electronic Money Issuers (EMI) – Others

1. DCPay Philippines, Inc.
2. G-Xchange, Inc. (GXI)
3. PayMaya Philippines Inc.

List of InstaPay Participants (as of June 30, 2021)

Sender/Receiver:

Universal and Commercial Banks

1. Asia United Bank Corporation
2. Bank of Commerce
3. Bank of the Philippine Islands
4. BDO Unibank, Inc.
5. China Banking Corporation
6. CTBC Bank (Philippines) Corporation
7. Development Bank of the Philippines
8. East West Banking Corporation
9. ING Bank N.V.
10. Land Bank of the Philippines
11. Maybank Philippines, Inc.
12. Metropolitan Bank and Trust Company
13. Philippine Bank of Communications
14. Philippine National Bank
15. Philippine Trust Company
16. Rizal Commercial Banking Corporation
17. Robinsons Bank Corporation
18. Security Bank Corporation
19. Union Bank of the Philippines
20. United Coconut Planters Bank

Thrift Banks

1. AllBank, Inc.
2. BPI Direct BankO, Inc.
3. China Bank Savings, Inc.
4. Equicom Savings Bank, Inc.
5. Malayan Bank Savings and Mortgage Bank, Inc.
6. Queen City Development Bank, Inc.
7. Philippine Savings Bank
8. Producers Savings Bank Corporation
9. Sterling Bank of Asia, Inc.
10. Sun Savings Bank, Inc.

Rural Banks

1. Binangonan Rural Bank, Inc.
2. Camalig Bank, Inc.
3. Card Bank, Inc.
4. Cebuana Lhuillier Rural Bank, Inc.
5. Dungganon Bank, Inc.
6. East West Rural Bank, Inc.
7. Partner Rural Bank (Cotobato), Inc.
8. Rural Bank of Guinobatan, Inc.

Electronic Money Issuers (EMI) – Others

1. DCPay Philippines, Inc. (Coins.ph)
2. Grab Pay
3. G-Xchange, Inc (GXI)
4. PayMaya Philippines, Inc.
5. StarPay Corporation

Receiver Only***:

Universal and Commercial Banks

1. Philippine Veterans Bank

Thrift Banks

1. ISLA Bank, Inc.
2. Philippine Business Bank, Inc.
3. UCPB Savings Bank, Inc.
4. Wealth Development Bank Corporation

Rural Banks

1. Bangko Mabuhay, Inc.
2. BDO Network Bank, Inc.
3. Mindanao Consolidated Cooperative
4. Quezon Capital Rural Bank, Inc.

Electronic Money Issuers (EMI) – Others

1. OmniPay, Inc.
2. USSC Money Services, inc

List of Banks with Waived InstaPay Fees

Until Dec. 31, 2021

1. Asia United Bank
2. China Banking Corporation
3. China Bank Savings
4. Grabpay
5. ING Bank, N.V.
6. RCBC via DiskarTech mobile app
7. Robinsons Bank
8. Rural Bank of Guinobatan

Until Sept. 30, 2021

1. Camalig Bank
2. Eastwest Bank
3. Equicom Savings Bank (retail clients)
4. Landbank (retail clients)
5. UCPB

Until Aug. 20, 2021

1. Philippine National Bank

List of Banks with Waived PESONet Fees

Until Dec. 31, 2021

1. Asia Untied Bank
2. CIMB Bank Philippines
3. China Banking Corporation
4. China Bank Savings
5. CTBC Bank Philippines
6. Development Bank of the Philippines (Over the counter)
7. Eastwest Bank
8. Eastwest Rural Bank
9. HSBC (retail clients)
10. HSBC Savings Bank (retail clients)
11. ING Bank, N.V.
12. Philippine Veterans Bank
13. Rural Bank of Guinobatan
14. Union Bank (retail clients)

Until Sept. 30, 2021

1. Country Builders Bank
2. Equicom Savings Bank (retail client)
3. Landbank (retail client)
4. UCPB

Until Aug 20, 2021

1. Philippine National Bank

This article is published on BitPinas: What is InstaPay and PESONet Philippines?

Notes:

*An Automated Clearing House or ACH is a multilateral legally binding agreement that lays down the clearing and participation rules for a particular payment stream to facilitate electronic fund transfers among its participants.

**Based on information found online, an e-money license is necessary for a company that intends to store e-peso, and most especially if the company’s product allows the use of e-peso as a way to pay for goods online

***Only recipients accounts. InstaPay is ultimately a funds transfer service but it depends whether the participating entity can send and receive or just receive.