Compliance with consumer redress standards deferred

THE Bangko Sentral ng Pilipinas (BSP) has extended the transition period for compliance with consumer redress mechanism standards for electronic fund transfers (EFTs).

This extension aims to strengthen trust and confidence in digital payments as the adoption of electronic payment services continues to rise, the central bank said.

Memorandum M-2024-045, addressed to all direct clearing participants of InstaPay and PESONet, as well as clearing switch operators (CSOs), moved the compliance deadline to March 31, 2025 from Dec. 31, 2024.

The extension, approved by the Monetary Board on Dec. 19, noted that BSP-supervised institutions needed more time to fully implement the required systems.

“The BSP remains committed to supporting the payments industry throughout this transition,” the central bank said.

BSP Circular 1195, issued in June, mandates the provision of timely consumer recourse if issues are encountered during EFTs conducted through automated clearing houses (ACHs).

It covers person-to-person, person-to-merchant and person-to-biller payments, but not disputes regarding the delivery of goods and services.

The circular specifies that fund transfers must be completed within two to three seconds upon receipt of clearing advice, while bulk transfers should not exceed two hours.

Failed or rejected transactions must trigger a refund to the sender within one hour for single transactions and two hours for batch transactions. Unauthorized or erroneous transfers, however, are exempt from this provision.

Additionally, financial institutions are required to promptly inform both senders and beneficiaries of transaction statuses. Fees for unsuccessful transfers due to operational disruptions must also be refunded, ensuring consumers are not financially burdened by incomplete transactions.

With the extended compliance period, the BSP encouraged ACH participants and CSOs to use the additional time to enhance their systems and ensure that seamless consumer redress mechanisms are in place by the new March 2025 deadline.