We explore why some universal banks have dropped interbank fund-transfer fees on InstaPay and PESONet (BPI effective 1 July 2026 and RCBC effective 4 July 2026). We also explain the economics of “free” transfer fees and how the fee waiver can be sustainable for the banks.
InstaPay and PESONet are the two automated clearing houses established under the National Retail Payment System (NRPS) framework (BSP Circular No. 980, s. 2017), which operationalizes the BSP’s payment-oversight mandate under the New Central Bank Act (R.A. No. 7653, as amended by R.A. No. 11211) and the National Payment Systems Act (R.A. No. 11127, 2018).
InstaPay clears low-value transfers in real time, while PESONet clears higher-value transfers in batch settlement cycles (BSP Circular No. 1000, on the settlement of instant retail payments; Memorandum No. M-2018-026, on availability across all electronic delivery channels). Both have been designated Prominently Important Payment Systems under the NPSA, which places their pricing and reliability under direct BSP surveillance.
Clearing and switching are run by industry operators (BancNet as the InstaPay clearing switch operator and the Philippine Clearing House Corporation for PESONet) under the recognized payment system management body, Philippine Payments Management, Inc. A design feature dating to Circular 980 is decisive for pricing: the beneficiary is never charged for receipt, so the entire fee falls on the sending side.
The headline fee a customer pays on an off-us (interbank) transfer is not a single cost. It decomposes into:
The point that governs pricing is that items (b) and (c) are largely fixed and common: they are already borne on intrabank transfers, which some banks provide for free. The only genuinely incremental cost of an interbank transfer over an intrabank one is the switch cost of roughly PHP 1.50.
On 17 June 2026, the BSP issued Memorandum No. M-2026-025, lifting the long-standing moratorium on InstaPay/PESONet fee changes and implementing BSP Circular No. 1238. The circular installs a cost-reflective pricing rule: the fee on an interbank transfer may not be significantly higher than on an intrabank transfer, and the only permissible difference is the actual switch cost (approximately PHP 1.50 for InstaPay). It further requires that fees be benchmarked to actual processing cost, remain below over-the-counter charges, and that the recipient receive the full amount without deduction (consistent with the no-receiving-fee rule of Circular 980 and the price-transparency duties under the Financial Products and Services Consumer Protection Act, R.A. No. 11765, 2022). Covered institutions were given until 4 July 2026 to comply, and the same issuance mandates zero-fee digital payments for small merchants.
Once Circular 1238 caps the interbank-to-intrabank differential at the switch cost, the fee ceases to be a meaningful revenue line.
Since the common costs (items (b) and (c) above) are already sunk into the free intrabank service, waiving the interbank fee costs the bank only the switch fee per transaction, a de minimis amount set against the customer value each transaction generates.
Free transfers operate as an acquisition and retention instrument. The bank recovers the foregone fee through low-cost CASA deposits (which fund its lending margin), cross-sold products (loans, cards, insurance, wealth, payroll and SME services), and the behavioral data that lets it target those products. Keeping funds circulating inside the bank’s own ecosystem (forBPI, its app, VYBE, BanKo and BizKo) preserves cheap deposit funding.
Digital banks and e-wallets (UnionDigital, OWN, CIMB, and GCash) have used zero transfer fees as a customer acquisition strategy, exploiting their lower cost base. For an incumbent, collecting a de minimis regulated fee is not worth the deposit flight.
