THE PROPOSED MERGER between BancNet, Inc. and Philippine Clearing House Corp. (PCHC) has been okayed by their respective shareholders and endorsed by the Philippine Payments Management, Inc. to the central bank for approval. 

“The proposed merger, which was initiated by the Bankers Association of the Philippines (BAP), has been approved by the shareholders of both BancNet and PCHC with 86.67% of BancNet shares being voted in favor of the merger and 78.57% of PCHC shares being voted in favor of the merger,” BancNet said in a statement on Thursday.

The proposed merger now awaits approval from the Bangko Sentral ng Pilipinas (BSP), the Securities and Exchange Commission and the Philippine Competition Commission (PCC).

Last week, the PCC announced it was conducting a market inquiry into interbank electronic fund transfer services as it was reviewing the proposed merger.

Consumers and bank clients are invited to answer the survey on the PCC website ( until today (Aug. 11).

BancNet said it fully supports the proposed merger, which will help respond to recent developments surrounding the payments industry.

This would also prompt both clearing switch operators to undergo the necessary changes in their respective firms to address the “new realities” in the industry.

“The merger of BancNet and PCHC will create a stronger, more resilient organization that will be better able to provide safe, reliable, and efficient payment services for the benefit of consumers. This will be achieved through the consolidation of their financial, technology, talent, and other resources,” it said.

If approved, the merged entity will be able to comply with regulatory requirements under the Republic Act 11127 or The National Payment Systems Act.

It will also comply with BSP Circular No. 1089 or the Payments System Oversight Framework, Circular No. 1126 or the Adoption of the Principles for Financial Market Infrastructures (PFMI), and Circular No. 1127 or the Governance Policy for Operators of Payment Systems.

The consolidation of the two firms’ resources and budgets will also allow the merged entity to develop and implement a risk management plan, ensuring a secure data center and backups, which would address cybersecurity risks.

“The merged entity will result in better governance, as required under the new regulatory regime, achieve cost efficiencies arising out of the pooling of technology, risk management, and other resources, and achieve a sharper strategic focus on the development of the payments industry,” BancNet said.

It noted that the merged entity will operate as a utility for the payments industry.

“As such, it shall price its services to consider the costs of providing the service plus a reasonable margin to fund future investments in technology and processes necessary to maintain and improve the service,” it said.

“This will help ensure that costs remain in check and that pricing of payment services is transparent, fair, and equitable to all key stakeholders,” it added.

BancNet and PCHC are the clearing switch operators for InstaPay and PESONet, the automated clearing houses launched under the BSP’s National Retail Payment System in December 2015.

PESONet, which is being operated by the PCHC, enables high-value transactions and is considered as an electronic alternative to the paper-based check system and recurring payments.

Meanwhile, InstaPay is a real-time, low-value electronic fund transfer facility for transactions up to P50,000 and is handled by BancNet.

The total value of transactions coursed through InstaPay and PESONet climbed by 30.6% to P5.93 trillion as of June from P4.54 trillion in the same period in 2022.

In terms of volume, transactions done through the clearing houses stood at 398 million, 35.3% higher than the 294 million in the comparable year-ago period.

Under its Digital Payments Transformation Roadmap, the BSP aims to digitize 50% of total retail transactions and onboard at least 70% of Filipino adults to the financial system by the end of this year. — Keisha B. Ta-asan