M-2024-040: Revised Survey on Pricing of Digital Payments

To
Subject
BANGKO SENTRAL NG PILIPINAS
OFFICE OF THE DEPUTY GOVERNOR I PAYMENTS AND CURRENCY MANAGEMENT SECTOR MEMORANDUM NO. M-2O24. All Bangko Sentral ng Pilipinas-supervised lnstitutions Revised Surveyon Pricing of Digital Payments f n relation to the Bangko Sentral Memorandum No. M-2O24-O15, dated 24 May 2024, which outlines the Guidelines on Pricing of Electronic Payments and requests Bangko Sentral ng Pilipinas-Supervised Institutions (BSls)to participate in the annual Survey on Pricing Digital Payments (SPDP) regarding their provision of digital payment seruices, the Bangko Sentral acknowledges the BSls' participation in the initial run of the SPDP for the year 2023. In the succeeding runs of the SPDP, starting 01 January 2025, all BSls are encouraged to submit their responses to the SPDP by end-May of each year, with data and information covering the preceding calendar year. The link to the SPDP can be accessed by scanning the QR code below:
SPDP MS Forms QR Code
BSls providing responses through this survey link shall no longer submit the completed SPDP in Microsoft Word format as a PDF, as outlined in Memorandum No. 2O24-O15. The introduction of an online SPDP questionnaire aims to facilitate more efficient data collection and easier consolidation of responses, allowing for a faster release of the report to the participating BSls. In addition to streamlining the survey questions, the updated SPDP questionnaire introduces new questions regarding non-bank respondents' total asset values and whether BSls incur cost items exclusively for off-us payment transactions. lt also includes an updated set of options for describing the BSI's cost accounting, reporting, and monitoring processes. The detailed instructions for completing the SPDP using the link above are outlined in the attached Annex A.r For guidance and appropriate action. MAMERTO E. Deputy December 2o24 I For those not opting to submit their responses through the new survey link, the updated SPDP questionnaire in the Microsoft Word template, which was initially introduced under Memorandum No. M-2O24-O15, is attached as
Annex 8..
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MAB.AnnexA
DETAILED INSTRUCTIONS FOR COMPLETING THE ONLINE SURVEY ON PRICING OF DIGITAL PAYMENTS This Annex provides guidance for Bangko Sentral ng Pilipinas-supervised institutions (BSls) to complete the online Survey on Pricing of Digital Payments (SPDP). A. General Guidelines
l. Before completing the survey questionnaire through the link provided in the
Memorandum, BSls shall ensure that data and information described in this Annex had been completely and appropriately gathered from the BSls' internal documentations and reports.
2. Ensure all required fields are completed lfields marked with an asterisk (')].
3. Fleview your responses, especially numerical values and cost categorizations, to ensure
accuracy.
4. Numeric values shall not be abbreviated (e.9.,SOOO not 5 thousand). Decimals shall also
be inputted and not rounded to the nearest integer. All numeric values shall be in their Philippine Peso (PHP) equivalent.
5. All information provided in this survey will be treated as confidential in accordance with
the provisions of Republic Act No. 10'173, or the Data Privacy Act of 2o12. We will aggregate and anonymize the information, ensuring that specific details or comments are not attributed to specific entities. B. Specific Guidelines
l. OrganizationProfile
a. Organization lnformation Enter your organization's full name as registered with the Bangko Sentral. b. Contact Person Provide the name and official email address of the designated contact person. This individual will receive survey results and related communications from the Bangko Sentral.
c. llpe of lnstitution Select whether your organization is a bank (e.9., Universal,
Commercial, Thrift, etc.) or a non-bank financial institution (e.9., Electronic Money lssuer, Operator of Payment Systems). d. Total Assefs.. Non-bank respondents shall enter their total asset value as of DecemberSl of the previousyear, using complete numeric values, including decimals (e.g., SOOOOOO.T5). Avoid using abbreviations like "5 million." Please note that this question is a new addition to the survey.
2. Cost Accounting, Reporting, and Monitoring Processes
a. Choose the option that best describes your institution's cost accounting, reporting, and monitoring processes (ranging from Fully Manualto Advanced). Please note that this refinement to the survey question is an update to the SPDP. b. Those whose processes are not accurately described by the above options shall provide a brief description of their institution's cost accounting, reporting, and monitoring processes for digital payment services.
3. Cost Elements of Payments. As applicable, this portion shall be accomplished for each
of the pre-identified payment service-checks, cards, and electronic fund transfers via InstaPay and PESONet. a. For each identified payment service please determine the following in relation to cost categories described in Annex C (e.9., Authorization, Settlement, Customer Support, etc.) and any other additional cost categories identified by the BSI:
i. Whether costs are directly attributable to the provision of the payment service;
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MAB -AnnexA
ii. Whether costs are fixed or variable. For mixed costs, the BSI shall tag the relevant
cost categories as both fixed and variable; and
iii. Whether costs are incurred for off-us payment transactions only. This is a new
addition to the survey questionnaire. b. Provide the following data on these cost categories for each payment service:
i. Annual Costs: Enter the total annual cost for each cost category.
ii. Per-Transaction Costs:Enter the cost per transaction for each category.
iii. Costs Passed on to Customers:Specify the portion of costs, on a per-transaction
basis, that is passed on to customers.
4. Other Digital Payment Services
a. lf your institution offers digital payment services beyond checks, cards (i.e., debit cards and credit cards), lnstaPay, and PESONeI, select Yes" and specify these services. b. Please determine whether costs are direct or indirect: fixed. variable or both; and if incurred for off-us payment transactions only.
c. Report the total annual costs, costs incurred per transaction, and costs charged per
transaction. d. BSls can provide their responses for up to three additional digital payment services. e. lf the BSI offers more than three additional digital payment services, it may provide the above information on the remaining services via an email addressed to PPDD@bsp.gov.ph, with the subject line "SPDP <reference calendar year> - Additional lnformation.'
5. Description of Other Costs Incurred. Provide definitions and descriptions of any other
cost categories not identified in Annex C but relevant to your institution's provision of digital payment services.
6. Non-Cost Considerations for Pricing
a. List non-cost factors (e.9., competitor pricing, peer pricing, industry standards, regulations, etc.) that affect your institution's pricing decisions. b. Explain how these non-cost factors influence your pricing strategies.
7. On-Us Fees for Payment Services
a. Indicate whether your institution charges fees for on-us payment services (services where both the sender and receiver hold accounts within the same institution). b. Specify which on-us payment services have fees, if applicable.
8. Comments and Additional Information. Use this section to provide any relevant
information or feedback that may assist the Bangko Sentral in analyzing the survey data more effectively.

MAB-Annex B
INSTRUCTIONS FOR MANUAL SUBMISSION OF THE SURVEY ON PRICINC OF DIGITAL PAYMENTS (SPDPI BSP-supervised institutions have the option to submit their responses to the SPDP manually, subject to the instructions below:
l. The completed template shall be in pdf format with the filename:
"SPDP_<Yea r>_<BSl Na me>"
2. After accomplishing the questionnaire, the report shall be electronically transmitted
using the following prescribed format as subject:
'5PDP<space><Name of BS|>,<space><Refierence Period>", as illustrated below To:
Subject :
ppdd- paymentsdata@bsp.gov.ph
SPDP <Name of BSI>, DD MMMM YYYY (e.9., 3l December 2024)
3. Only electronic submissions originating from officially registered email address/es of
the BSls shall be recognized and accepted by the PPDD. The acknowledgment receipt for the submitted survey questionnaire and its corresponding validation results, upon availability, will be sent to the same registered email address/es.
4. Hard copysubmission shall not be accepted. Covered BSls that are unable to transmit
via email may submit the duly accomplished SPDP using any portable storage device (e.9., USB flash drive) through messengerial or postal services within the prescribed deadline addressed to:
The Director
Payments Policy and Development Department Bangko Sentral ng Pilipinas Ground Floor, Economic Financial Learning Office BSP Complex, A. Mabini Street, Malate lOO4 Manila Alt information provided in this survey will be treated as confidential in accordance with the provisions of Republic Act No. lO'173, or the Data Privacy Act of 2012. We will aggregate and anonymize the information, ensuring that specific details or comments are not attributed to specific entities.
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MAB - Annex B
Suruey on Pricing of Digital Payments
Manual Su rvey Questionnaire for BSP-Su peruised Institutions (BSls) A. BSI lnformation
l. Please tell us about your organization:
Orqanization Name
Contact Person/s
E-mail Address/es
2. Which of the following best describes your organization? Please check.
Bank
Operator of payment system
Electronic Money lssuer
Other (please speciff)
2.a. lf NON-BANK, provide the amount of total assets (in PHP) as of end of the immediately preceding calendar year:
3. Which of the following payment services does your organization provide?
(Check all that apply)
Checks
Debit card
Credit card
Electronic payments - PESONeI
Electronic payments - InstaPay
Others (speciff)
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MAB - Annex B
B. Cost Elements of Payments
'1. Which of the following best describes the cost accounting, reporting, monitoring and analysis processes in your organization? O Fully Manual (Paper-Based). All processes are completed using physical documents and manual calculations. Minimal use of sofjlware or automated tools. Primarily Manual with Limited Digital Assistance. Processes rely heavily on manual inputs with some support from basic digital tools (e.9., spreadsheets for calculations and record-keeping ). Hybrid Approach (Manual and Digital). A mix of manual processes and digital tools is used, with digital tools helping with certain repetitive tasks, but with su bsta ntial ma nua I i ntervention sti | | req ui red. Partially Automated (lntegrated Software for Select Tasks). Some processes, such as data collection and reporting, are partially automated using integrated software solutions, though manual adjustments are still frequently necessary. MostlyAutomated with Occasional Manual Adjustments. Most processes are automated, with digital tools managing data collection, calculations, and reporting, but still require occasional manual oversight or adjustments. End-to-End Automated (Fully Integrated System). All processes are automated, utilizing an end-to-end integrated system for data collection, processing, reporting, and analysis with minimal or no manual intervention. Advanced Automated System with Predictive Anallrtics. A fully automated system that not only handles end-to-end processes but also integrates predictive analytics or Al to support forward-looking analysis and decision￾making. Custom or Specialized Automation. Processes are highly customized to the organization's needs, using a specialized or proprietary automated solution designed specifically for cost accounting, reporting, and analysis. lf you selected Fully Manual, please answer questions 7 to 9 only. lf you selected any option other than Fully Manual, answer questions 2 to 9. What is the annual cost (in PHP) that your companylnstitution incurs from provid i ng payment services?
3. Accomplish the questions below (sub-items i and ii) for EACH payment
instrument/service offered by the BSl.
3-a: PESONeI Electronic Fund Transfer Service o 2.
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MAB-Annex B
i. Applicability.AttributionandVariability
For the following cost elements, please indicate if each cost is applicable to the BSl, whether the same direct or indirect, and if the cost is considered as fixed, variable or mixed:
ii. Costs Incurred and Charged
For the following cost elements, please fill in the relevant data on annual cost incurred and average cost per transaction, and information on whether the cost is being charged to end-users:
ro Definitions are found in Annex C. rr costs are deemed Applicable if the BSI separately monitors, measures, and/or account for these costs. r2 Definitions are found in Annex C. 13 Payment transactions where the payer and the payee use accounts held at different financial institutions Payment handling cost Authorization cost Fleturn cost due t( insufficient balance Cancelation cost Payment￾specific infrastructure and maintenance cost Payment-specific lT cos' Clearing cost Settlement cost Security cost Fraud prevention cost Costs for supporting activities Marketing anc ar{varticino coct Customer support cost Other cosl items [add rows as D€c€ssEtr!1 ffi Payment handling cost Authorization cost Return cost due t( insufficient balance Cancelation cost Payment￾specific infrastructur€ and maintenance cost Payment-specific l'l cost Clearing cost Settlement cost Security cost Fraud prevention cost Costs for supporting activities Marketing anc advertisinq cost Customer support cost Other cosl [add rowsas necessary
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MAB - Annex B items
3-b: InstaPay Electronic Fund Transfer Service
i. Applicability-Attribution and Variability
For the following cost elements, please indicate if each cost is applicable to the BSl, whether the same direct or indirect. and if the cost is considered as fixed. variable or mixed:
ii. Costs lncurred and Charged
For the following cost elements, please fill in the relevant data on annual cost incurred and average cost per transaction, and information on whether the cost is being charged to end-users:
ra Definitions are found in Annex C. rs Costs are deemed Applicable if the BSI separately monitors, measures, and/or account for these costs. 16 Definitions are found in Annex C. r7 Payment transactions where the payer and the payee use accounts held at different financial institutions Payment handling cost Authorization cost Fleturn cost due t( insufficient balance Cancelation cost Payment￾specific infrastructure and maintenance cost Payment-specifl c lT cos' Clearing cost Settlement cost Security cost Fraud prevention cost Costs for supporting activities Marketing anc advertisinq cost Customer support cost Other cos items [add rows as necessary) IIGEZIEII Payment handling cost Authorization cost Return cost due t( insufficient balance Cancelation cost ' Payment￾specific infrastructure and maintenance cost Payment-specific l'l cost Clearing cost Settlement cost Security cost Fraud prevention cost
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Costs for supporting activities
Marketing an( advertisino cost
Customer support cost
Other cosl items
[add rows as necessary.
MAB-Annex B
3-c: Check Payment Services
i. Applicability Attribution and Variability
For the following cost elements, please indicate if each cost is applicable to the BSl, whether the same direct or indirect. and if the cost is considered as fixed. variable or mixed:
Costs Incurred and Charged
For the following cost elements, please fill in the relevant data on annual cost incurred and average cost per transaction, and information on whether the cost is being charged to end-users:
18 Definitions are found in Annex C. rs Costs are deemed Applicable if the BSI separately monitors, measures, and/or account for these costs. 20 Definitions are found in Annex C. 2r Payment transactions where the payer and the payee use accounts held at diffierent financial institutions il. Payment handling cost Authorization cost Fleturn cost due t( insufficient balance Cancelation cost Payment￾speciflc infrastructure and maintenance cost Payment-specifi c lT cos' Clearing cost Settlement cost Security cost Fraud prevention cost Costs for supporting activities Marketing anc advertisinq cost Customer support cost Other cos' items [add rows as necessary, Fleturn cost due insufficient balance
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and maintenance cost
Settlement cost
Security cost Fraud prevention cost
Costs for supporting activities
Marketing anc advertisinq cost
Customer support cost
Other cosl items
[add rows as necessary.
MAB - Annex B
3-d: Card Payment Services
i. Applicability-AttributionandVariability
For the following cost elements, please indicate if each cost is applicable to the BSl, whether the same direct or indirect, and if the cost is considered as fixed. variable or mixed:
Costs Incurred and Charged
For the following cost elements, please fill in the relevant data on annual cost incurred and average cost per transaction, and information on whether the cost is being charged to end-users:
22 Definitions are found in Annex C.
23 Costs are deemed Applicable if the BSI separately monitors, measures, and/or account for these costs. 2a Definitions are found in Annex c. 2s Payment transactions where the payer and the payee use accounts held at different financial institutions il. Payment handling cost Authorization cost Return cost due t( insufficient balance Cancelation cost Payment￾specific infrastructure and maintenance cost Payment-specific l' cost Clearing cost Settlement cost Security cost Fraud prevention cost Costs for supporting activities Marketing anc advertisinq cost Customer support cost Other cos items [add rows as necessary,
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Cancelation cost
Payment￾specific infrastructu r( and maintenance cost Payment-specific l1 artst Clearing cost Settlement cost Security cost Fraud prevention cost Costs for supporting activities Marketing anc advertisinq cost Customer support cost Other cos items [add rows as necessary MAB - Annex B 3-e: Other Payment Services (Please prepare separate set of tables for EACH type of payment service) Payment Service:
i. Applicability.AttributionandVariability
For the following cost elements, please indicate if each cost is applicable to the BSl. whether the same direct or indirect. and if the cost is considered as fixed, variable or mixed:
Payment handling cost
Authorization cost
Fleturn cost due t( insufficient balance
Cancelation cost
Payment￾specific infrastructure and maintenance cost Payment-specific l'l cost Clearing cost Settlement cost Security cost Fraud prevention cost Costs for supporting activities Marketing anc advertisinq cost Customer support cost Other cosl items [add rows as necessary.
ii. Costs Incurred and Charged
For the following cost elements, please fill in the relevant data on annual cost incurred and average cost per transaction, and information on whether the cost is being charged to end-users:
26 Definitions are found in Annex C.
27 Costs are deemed Applicable if the BSt separately monitors, measures, and/or account for these costs.
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Ii1[ffiT
Payment handling cost
Authorization cost
Return cost due tc insufficient balance
Cancelation cost
Payment￾specific infrastructur€ and maintenance cost Payment-specific 11 cost Clearing cost Settlement cost Security cost Fraud prevention cost Costs for supporting activities Marketing anc advertisinq cost Customer support cost Other cos' items [add rows as necessary. MAB - Annex B
4. Please provide herein. definitions of other cost items identified above, if any:
5. Please provide herein other non-cost considerations for pricing (these may include
pricing of competitors, peers, and/or industry, etc.):
Please provide details on how these specifically affect pricing of payment services.
6. Does the BSI charge on-us3o fees for payment services?
-
Yes
-
No lf yes, please check which services:
Check
Debit card
Credit card
Electronic payments - PESoNet
28 Definitions are found in Annex c.
2e Payment transactions where the payer and the payee use accounts held at different financial institutions 30 An on-us payment transaction is a payment transaction where both the payer and the payee hold accounts at the same financial institution.
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MAB - Annex B
Electronic payments - InstaPay
Others (specifl7)
7. Pleaseprovideanyothercommentsthatyouthinkwouldberelevantforthissurvey.
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Definition of Cost Categories
MAB -Annex C
Cost Definition
A. Payment handling costs
Refer to the costs accrued when an end-user initiates a pavment until that pavment is settled. costs Flefer to the costs of processing the payment authorization request for certain payment instruments (e.9., fund transfers, e-money) by verifying whether a specific transaction can be executed (e.9., right credentials, sufficient account balance), including costs related to maintaining databases with authorization-related data. to insufficient balance Refer to the costs of returning a payment after authorization that could not be settled due to insufficient funds (e.9., if the authorization process does not involve blocking of the respective amount). / Cancelation costs Refer to the costs involved in canceling a fund transfer transaction before a transaction is settled, as well as processing costs associated with disputed electronic pavments that have been settled. B. Payments-specific infrastructure and maintenance costs Flefer to the costs for the depreciation and maintenance of equipment and for the performance of processes, whose sole purpose is to make payment-related services available. lT costs Refer to the costs for payments-related software developments, interfaces for internet banking, interfaces with automated teller machines (ATM)/point-of-sale (POS) networks and other centralized infrastructures, etc. This cost element excludes ATM maintenance costs and POS terminal manaqement costs. Flefer to the costs associated with the process of transmitting, reconciling, confirming payment orders prior to settlement, including the netting of instructions and the establishment of final oositions for settlement. Refer to the costs associated with the process of discharging obligations in respect of funds transfers between two or more parties.
C. Security costs Refer to losses and the costs of preventing potential losses
of value from holding payment instruments or providing services related to payment instruments due to unforeseen circumstances or illeqal activitv. costs Flefer to the costs of managing the risk of fraud, excluding the costs for insurance against fraud. The components of these costs may include the maintenance and monitoring of 'black lists" and other attempts for fraudulent payments; investigating fraud attempts;etc.lf such cost is part of costs related to shared services with other products of the Bangko Sentral ng Pilipinas-supervised institution, only include the costs related to the provision of payment service. D. Costs for supporting activities Flefer to all costs for activities that are related to payment instruments and payment-related services and are of foundational and/or su pporting nature.
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Cost Definition
Marketing and advertising costs
Flefer to costs for marketing and information dissemination aimed at acquiring new customers and/or campaigns targeting existing customers. lt is important to note that this cost element contains two types of costs: i) the costs associated with new customer campaigns are one-off costs that may not recur periodically, and ii) the costs associated with educating and offering new services to existing customers are mainly ongoing, that is, they are recurring costs. Campaigns specifically aiming to educate existing and/or potential customers should also be included under this cost element. lf such cost is part of costs related to shared services with other products of the BSl, only include the costs related to the provision of payment service. costs Refer to costs for responding to customer complaints or providing further clarifications related to a particular payment instrument/transaction account activity/oyalty programs (including staff costs, consumables, etc.), to the extent not included in other cost elements. lf such cost is
part of costs related to shared services with other products
of the BSl, only include the costs related to the provision of payment service. MAB -Annex C