LOCAL regulations on electronic payments (e-payments), especially on blockchain technology, can be improved further to lower remittance costs and make transaction processes more efficient, according to a technology company looking to expand in the Philippines.

Ripple’s head for Southeast Asia operations Kelvin Lee said in an interview that the blockchain company will still push through with its expansion plans in the country despite the ongoing coronavirus pandemic, but declined to give specific details.

This is in line with the central bank’s aim to promote e-payments across the country, he said.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno wants 50% of all payments, both in value and volume, done digitally before his term ends in 2023.

Ripple provides services to partner financial institutions to aid them in sending money globally via blockchain.

However, Mr. Lee said the Philippines could further improve the cost efficiency in sending or receiving money through better regulations.

Citing data from the World Bank, he said the country is among those with remittance corridors relatively cheaper compared to other countries.

“Improving cost efficiency of cross-border payments will largely boil down to regulatory controls. The current regulations meted out by the Philippines government and BSP in lowering the cost of cross border payments are welcomed as it enables more fintech players to enter the market, while also protecting consumer interest,” Mr. Lee said via email last week.

The central bank has launched Philippine Payment and Settlement System or PhilPaSS and the regulatory framework National Retail Payment System (NRPS) to promote an efficient payments and settlements systems.

“The cost efficiency of cross-border payments can also be further improved with the emergence of blockchain technology and digital assets — both of which require regulatory clarity to drive innovation and protect consumer interest,” Mr. Lee added.

However, he warned that regulatory control should be balanced as over-regulation could be “disruptive” to innovation, while under-regulation may give rise to financial crimes or issues on compliance.

“BSP is on the right track and we are very optimistic about the current laws they are pushing for to spur growth in the fintech sector,” he said.

Mr. Lee said digital services can substantially lower the transfer costs for customs, such as overseas Filipino workers when sending money back home.

For instance, Ripple uses blockchain technology and digital asset XRP to process the transfer of money faster and at a reduced cost as this “eliminates the need for pre-funding in destination currencies, thus dramatically lowering costs while enabling real-time payments in emerging markets like the Philippines.”

Mr. Lee said the company and one of its partners are also looking at waiving or lowering the end-user remittance fees for transactions into the Philippines to give customers financial relief amid the COVID-19 pandemic. — Beatrice M. Laforga