BSP clarifies bank transfers need not be free

The Bangko Sentral ng Pilipinas (BSP) clarified that it never required banks and e-wallets to waive digital fund transfer fees, despite issuing Circular No. 1238 to make transfer fees reflect actual costs.

BSP implemented Circular 1238 last July 4, 2026, requiring that any gap between intrabank and interbank transfer fees only reflect the cost of routing a transaction through a payment network. BSP pegs this cost, called the “switch cost,” at P1.50, meaning banks with free intrabank transfers should charge no more than P1.50 for interbank ones.

Since then, several banks have gone ahead and made interbank transfers free entirely, with most of the country’s top 20 financial institutions already complying.

Circular 1238 states that its pricing mechanism should “uphold fairness across end-user groups.” This means electronic payment fees should stay lower than fees for manual or over-the-counter transactions.

Fintech Alliance PH chairman Lito Villanueva said most banks and e-wallets have already complied, though business models vary across the industry. He explained that banks can absorb zero fees since they earn from lending and insurance, while e-wallets rely more heavily on transaction fees to stay afloat, including services for unbanked communities in remote island barangays.

“We are grateful to the Bangko Sentral ng Pilipinas for this important clarification. Following constructive dialogue between the BSP Monetary Board Members and the FinTech Alliance PH, it is now clear that Circular No. 1238 is a cost-based fair pricing guideline, not a zero-based mandate,” said Villanueva.

“Compliance does not require zero fees, nor does it limit off-us P2P electronic fund transfer fees to switch cost alone, and FAQ No. 7 should not be read as a rigid, switch-cost-only formula.”