BSP-Indonesia alliance to spur digital financial innovation in the Philippines
INDONESIA and the Philippines are keen to revolutionize their payment system and digitize their financial services industry.
The two, therefore, forged an alliance through their respective central banks to foster innovation in payment systems.
To be more precise, both countries seek to make payment systems more secure, reliable, and efficient while also focusing on driving greater innovative initiatives.
Bangko Sentral ng Pilipinas (BSP) and the Bank of Indonesia (BI) have signed a memorandum of understanding (MoU) to solidify efforts in producing a framework that highlights their cooperation.
Signed by BSP Governor Benjamin Diokno and BI Governor Perry Warjiyo, the MoU signifies the two central banks’ commitment to strengthening their economy and better develop financial services.
For Diokno, it was important that BSP directs its financial inclusion growth through innovation because digital solutions are proven to be effective and reliable.
Last year, Indonesia managed to boost financial inclusion – the accessibility and affordability of financial products and services for both individuals and businesses – significantly by leveraging digital innovations. BSP now hopes to do the same.
Diokno said, “Facilitating digital access means expanding the delivery of basic financial services through mobile phones, cards or the internet.
“Such services should be suited to the customers’ needs and delivered responsibly, at a cost affordable to customers and sustainable for providers.”
The MoU is aligned with BSP’s goals to develop a digital financial ecosystem that can facilitate diverse players who are catering to the various need of the market like those from low-income and underserved community segments.
Such goals are built on three pillars which are the democratization of transactional account access, the establishment of an expansive network of low-cost touchpoints and the creation of an efficient retail payment system architecture.
BSP is also making news as it recently announced a Southeast Asia-wide collaborative effort to create an interoperable QR payment system in the region.
This follows an earlier move by the bank where it adopted the National QR Code Standard to ensure the interoperability of QR-based payment and financial services in the country.
According to BSP’s Monetary Board, the standards are in line with the bank’s central mission which is to ensure the efficiency of payment systems in support of inclusive economic development.
The establishment of the QR code standards is expected to encourage the adoption of innovative financial solutions among micro and small enterprises in the Philippines and enable a centralized move to improve the digital financial ecosystem.
BSP also mentioned that QR technology would better benefit enterprises as it is more economical than electronic data capture equipment.
Diokno revealed that BSP is currently working with central banks in Indonesia and Thailand to implement the system at scale and help create a more efficient financial ecosystem for over 600 million Southeast Asians.
QR code technology has become a favorable component by the country because the solution is affordable and offers a convenient financial transaction experience.
BSP further elaborated on the benefits of the digital solution by saying, “The use of this code minimizes encoding errors. Moreover, it is faster and easier to just scan the code than to dip or swipe a card and sign a charge slip.”
Hopefully, these efforts, together with other digital innovation initiatives, will push the nation closer to achieving a cash-lite society.