BSP's “free transfer fee rule” will break E-wallets of unbanked consumers

The Bangko Sentral ng Pilipinas has drawn a line in the sand , and this week it’s calling GCash and Maya to a room to explain themselves. This should ring alarm bells for any consumer who has used a e-wallet app to send money to a relative in the province, pay a sari-sari store or cash out at a nearby agent because the nearest bank branch is two towns away.

Let’s be blunt about what’s happening. Under BSP Circular 1238, fees for fund transfers between institutions should not be “materially different” from those between accounts within the same institution, except for the small switching cost, which is estimated at P1.50 per InstaPay transaction. In practice it is a blunt instrument swung at two very different kinds of businesses, as if they were the same, and the public will eventually feel the consequences of that error. Banks can afford this free fee and ignore. E-wallets cannot—and that difference is important to all of us consumers.

For BPI, Metrobank, Landbank or Security Bank, doing free transfers is simply giving up a rounding error on their income statement. These institutions derive as much as 87 per cent of their revenue from loans and deposits. Fee income is a side dish, not the main course.  A universal bank with a 33% net income margin can reduce fees without blinking an eye. E-wallets don’t have that option. They derive roughly 90% of their total revenue from fees and commissions — this *is* their  main course, not a side dish. Many of the bigger players are still running at a loss. If you take away that revenue, you are not just trimming the fat off a healthy business, you are cutting into the muscle that keeps the lights on.

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Why should we care about the balance sheet of e-wallet operators GCash or Maya? It is because their fee income has been quietly subsidizing the very infrastructure that made digital finance possible for people previously unserved by banks.  43% of e-wallet users who cash out still do so through offline agents — sari-sari stores, pawnshops, remittance centers not from banks. These are heavily concentrated in Visayas, Mindanao and lower income households. That offline network doesn’t come for free: a big chunk of those costs, more than a third, is paid for directly from bank-transfer fee revenue. You’re not just making transfers cheaper. You zero that revenue out overnight.” You are taking the money away from the rails that reach back to people left behind by banks.

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The BSP’s chosen comparison example is revealing: a provider charging ₱10 for an interbank transfer must show its own intra-wallet transfer costs ₱8.50 or it “appears noncompliant.” That’s a fair question to ask of a bank quietly banking float income from deposits. It’s a much harder question to force on an e-wallet that has spent a decade establishing confidence, agent networks, and fraud systems in unbanked barangays where fee income is its lifeline.

No one is arguing for overpriced and unjustified fees. The BSP is right in demanding transparency and cost justification. But it is a real difference between ‘show your math’ and ‘run this core service at zero whatever it costs you.”  When e-wallets are squeezed into unsustainable pricing before their business model matures, the damage won’t show up as a headline. It will appear quietly, months from now, as:

First, slower deployment of new fraud protections and security upgrades. Second , harder to maintain agent networks in far-away barangays- Reduced appetite from investors to fund the next wave of inclusion-oriented fintech. And third, wallets potentially absorbing losses elsewhere – by way of withdrawal fees, inactivity fees, or poorer service quality – impacting the same low-income users this policy claims to protect.

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Cheering “zero fees” without asking who pays is a mistake, and frankly, short-term thinking for a consumer victory. Banks can have this policy for lunch, while E-wallets are being asked to eat their own arm . The fix isn’t identical for unequal players .

Rules must be built around each institution’s actual economics, so that the fee-free convenience millions of Filipinos now expect doesn’t come at the cost of the very access, security, and innovation that got them banked in the first place. (next story)

Who wants to derail PBBM’s roadshow?

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Poor President Marcos. His administration’s plan to announce the completion of a major Southern artery during his fifth SONA seems headed for yet another political roadblock.

And no, the problem isn’t money or lack of trying.

DPWH insiders say a few households and their political backers in Southern Tagalog, whom we’ll call “Team Harang”are holding hostage a highway , motorists have waited nearly a decade to use.

Here’s a clue: the long-awaited road is supposed to stitch together two of Southern Luzon’s fastest-growing provinces, turning a two-hour crawl between booming industrial and residential hubs into a drive of roughly 30 minutes. When fully complete, it is expected to carry tens of thousands of vehicles every day.

Another clue: Major property developments are rising along the corridor, along with a new logistics hub of a major Japanese retailer.

So what’s stopping a highway this important just inches from the finish line?

According to people familiar with the project, unresolved right-of-way issues remain. And significantly, local officials are reportedly insisting on costly and technically complicated alternatives that would require fresh studies, additional funding and, inevitably, more delays.

Their demand for safe access is reasonable. The solutions being pushed? Not necessarily.

One proposal comes with a hefty price tag. Another is an engineering headache. Both threaten to push back completion of a project that is otherwise nearing the finish line.

Yet “Team Harang” appears unwilling to budge until every demand is met.

So thousands of motorists can wait. Investors can wait. DPWH and its private partners can wait. Even PBBM’s pre-SONA ribbon-cutting can wait.

Funny how a project meant to benefit millions can be hostaged by the political calculations of a handful.

To be fair, DPWH and its private contractors don’t get a free pass either. Right-of-way budgets that arrive late, engineering plans finalized without enough lead time for local consultation, and timelines built around political milestones instead of realistic project schedules all create the conditions for exactly this kind of impasse.

Still, many in government are quietly asking a bigger question: Is this simply a local dispute, or has it become political theater?

Because the timing is difficult to ignore. An unfinished highway days before the SONA would become a giant concrete reminder of a promise delayed.

With 2028 drawing closer, every major infrastructure project carries political value. Every delay carries political consequences.

Maybe this is really about a few households. Or maybe some local kingpins have realized that the fastest way to gain leverage is not by building roads—but by stopping them.

Forget people power.

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In the South, it seems a few local officials can keep an entire region waiting—and even make a President wait.