By Daryll Edisonn D. Saclag, Reporter

Philippines to have unified ATM network by next year

Posted on January 26, 2015

THE MUCH-awaited merger of the country’s three automated teller machine (ATM) networks could finally take place next year, paving the way for lower transaction costs for consumers, senior central bank and industry officials said late last week.

PEOPLE line up to make transactions on automated teller machines at a Quezon City mall in this Dec. 23, 2014 photo. -- BW FILE PHOTO
Bankers Association of the Philippines (BAP) President Lorenzo V. Tan told reporters at the annual reception for the banking community at the Bangko Sentral ng Pilipinas (BSP) headquarters in Manila last Friday that a memorandum of agreement that would get the ball rolling for the consolidation of BancNet, MegaLink, and Expressnet was signed earlier this month.

“We completed all signatures after the New Year. Now [we] have a signed agreement and [we] work on the consolidation,” Mr. Tan said, adding that the process will take “probably a year” before the system is fully in place.

Another industry official, who requested anonymity, said BancNet will be “the surviving switch, while MegaLink will be re-purposed.”

“BDO [Unibank, Inc.] and UnionBank [of the Philippines] will activate their BancNet membership, while the other smaller MegaLink members will be accepted as members as well,” the official said via text.

“This is a milestone that we have been looking forward to on the way to greater goal of establishing a national retail payment system that will achieve interoperability, efficiency, security and inclusiveness in the way we settle financial transactions,” BSP Governor Amando M. Tetangco, Jr. said in his speech at Friday’s event.

At present, inter-ATM and interbank transaction charges of the three ATM networks range from P5 to P15.

BancNet, Inc. was the first ATM consortium to operate in the Philippines, starting with eight member banks led by then-Equitable PCI Bank and Security Banking Corp. Today, BancNet is comprised of 34 of the country’s largest banks.

Megalink is a consortium of 17 commercial banks with a combined network of 2,921 ATMs nationwide. Expressnet member banks, meanwhile, include Ayala-owned Bank of the Philippine Islands (BPI), BPI Family Savings Bank, BDO Unibank, Inc. and Land Bank of the Philippines. Some MegaLink member banks are also reconnected with Expressnet.

In 2010, the three networks interconnected their point-of-sales, allowing card holders of their member banks to make debits anywhere.

BSP Deputy Governor Nestor A. Espenilla, Jr. said the merger, if realized, could drive ATM transaction costs down.

“There will be competition from other modalities so that will drive costs further down,” Mr. Espenilla said.

Mr. Tan likewise noted that the planned consolidation could entail benefits for banks. “It’s a way of lowering your unit cost and making it more efficient. The more earnings you have, the more money you have for research and development,” he explained.

Mr. Espenilla added that the stay order issued by the BSP in September 2013 on the planned increase in ATM fees sought by several banks such as BPI, Metropolitan Bank & Trust Co., BDO Unibank, and Philippine National Bank will remain in place until further notice.

Several banks had earlier sought to increase ATM charges -- to P15 per transaction from the current P11 -- for cardholders accessing ATMs not under their mother bank.

They said the adjustments were needed given higher interbank/internetwork and ATM maintenance costs.

The BSP, however, wanted to scrutinize “whether these increases are warranted.”