The Bangko Sentral ng Pilipinas (BSP) has approved the consumer redress mechanism standards for account-to-account electronic fund transfers (EFT) to boost trust and confidence in digital payments.

In a circular signed by BSP Deputy Governor Mamerto Tangonan on June 1, the BSP approved the new standards for EFTs under the National Retail Payment System Framework.

The guidelines will be included in the Manual of Regulations for Payment Systems (MORPS).

'The use of electronic payments continues to expand and is expected to steadily grow. With the increased adoption of digital payment services, the BSP recognizes the need to ensure that BSP-supervised institutions (BSIs) that offer EFTs through their participation in the automated clearing house/s (ACH) provide appropriate and timely consumer recourse mechanisms on issues lodged by consumers,' it said.

The regulation will be applied to all clearing switch operators and ACH participants that provide account-to-account fund transfers, including person-to-person (P2P), person to merchant (P2M) and person to biller (P2B) payments.

The BSP clarified, however, that the circular does not cover dispute resolution involving the delivery of products and services underlying the payment transaction.

The central bank has given CSOs and ACH participants until Dec. 31 to 'develop the necessary resources to comply' with the new rules.

Based on the new rules, the timeframe of transferring money to the account of a beneficiary should be within two to three seconds from receipt of clearing advice. For multiple fund transfers, the time should not be more than two hours.

The originating financial institution should also provide timely notifications to inform the sender about the current status of the transaction, while the receiving financial institution should inform the beneficiary about the funds received.

Meanwhile, rejected, returned and timed-out transactions should prompt financial institutions to return the funds to the sender within one hour from the receipt of send instruction.

'For batch clearing and settlement of electronic payments and corresponding use cases, the amount debited from the sender's account shall be returned to the sender's account within two hours from receipt of settlement report from the CSO for rejected transactions and returned transactions,' the BSP said.

However, this will not be applied to unauthorized or erroneous transactions.

Meanwhile, the parameters when to collect fund transfer fees, as well as the criteria as to when to return the collected fee, must be clearly established in the ACH operating guidelines, the BSP said.

Senders should not bear fees for unsuccessful transfers and transactions that did not materialize due to operational disruptions.

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