A randomized study involving IPA Philippines, the Bangko Sentral ng Pilipinas, and RCBC suggests that lower InstaPay transfer fees can materially change how Filipinos use digital banking. The research focused on the effect of interbank transfer pricing, an area that has become increasingly important as standard InstaPay charges of around ₱15 to ₱25 can discourage small-value transfers, especially among lower-income users.

Using data from 15,000 app users across RCBC’s Pulz and DiskarTech platforms, the study found that reducing fees boosted transaction activity, with the strongest effect seen among mass-market customers and previously inactive account holders. The results add new evidence to the argument that pricing influences not only revenue, but also access and participation in digital finance.

Randomized test tracked actual user behavior

The study was conducted by Innovations for Poverty Action Philippines, BSP, and Rizal Commercial Banking Corporation. Researchers assigned different InstaPay fee levels to users of RCBC’s commercial banking app, Pulz, and its mass-market microfinance platform, DiskarTech, then measured how transaction behavior changed.

According to the report, the analysis combined actual transaction logs with survey responses, allowing the researchers to compare stated attitudes with observed behavior. The focus was on whether lower interbank transfer costs would alter day-to-day payment habits and bring more people into regular digital banking use.

Biggest gains came from zero-fee transfers

The clearest result came from DiskarTech users. When InstaPay transfer fees were cut to zero, total transaction activity among these mass-market customers doubled, indicating a strong response to the removal of even relatively small charges.

Among Pulz users, who represent RCBC’s more traditional mobile banking segment, lower fees also lifted usage, though less dramatically. Their transaction activity increased by about 30%, showing that pricing mattered across customer groups, even if the effect was not uniform.

The study also found an activation effect among people who had accounts but were not actively using digital payments. Waived fees helped move dormant users into regular transaction behavior, with the effect described as particularly visible among low-income households.

Pricing seen as an inclusion issue, not only a revenue issue

RCBC Executive Vice President and Chief Innovation and Inclusion Officer Lito Villanueva said the findings show that reducing friction leads people to transact more. In his framing, the data suggest transfer pricing should be viewed not just as a business decision but also as a financial inclusion decision.

That conclusion aligns with earlier BSP consumer research cited in the article. In the BSP Consumer Expectation Survey, one in three Filipinos reportedly identified high transfer fees as a major obstacle to using digital financial channels.

Taken together, the findings indicate that small fixed charges can act as a practical and psychological barrier for micro-transactors and lower-income users, who may decide that moving money digitally is not worth the added cost and instead continue relying on cash.

Regulators are pushing banks to revisit payment fees

The study arrives as BSP advances Circular No. 1238, which governs retail payment service pricing. The central bank is urging financial institutions to re-evaluate interbank fee structures, reflecting broader concern over whether current pricing supports or slows digital adoption.

IPA Principal Investigator Dr. Russell Toth said during the study presentation that lower fees produce a measurable activation effect among non-users. Still, the article notes that pricing alone will not determine the success of digital payments.

The next confirmed step is a broader reassessment of retail payment pricing under the BSP circular. The study’s results give banks and regulators empirical evidence to weigh, while also underscoring that wider digital uptake will still depend on reliable network infrastructure, strong consumer protections, and broader merchant acceptance.

Source: bitpinas.com