BPI sees stronger customer growth with expanded agency banking, free transfers

BANK of the Philippine Islands (BPI) expects its customer growth to be supported by the continued expansion of its agency banking program and its move to permanently remove InstaPay and PESONet transfer fees.

BPI President and Chief Executive Officer Jose Teodoro K. Limcaoco said at a media roundtable on Wednesday that their May BPI Dito flagship agency banking program has expanded via its growing number of partnerships, allowing it to increase its nationwide presence.

“What we have is we have partner businesses. [We have partnered with] 34 businesses with over 7,100 doors. So, the presence is all over. We work with these known brands, because when you’re doing a banking transaction, your customers must also know that they trust the partner,” Mr. Limcaoco said.

On Wednesday, the bank said all partner stores will now become mini branch hubs that are able to offer account opening, deposits, and withdrawals as it bolsters its agency banking proposition.

At present, 1,369 of May BPI Dito partner stores offer cash deposit and withdrawal services.

BPI Senior Vice-President and Agency Banking head Jose Raul E. Jereza said the bank targets to have all partner stores equipped with those functions by the middle of next year.

He added that the bank’s partnership with Robinsons Retail Holdings, Inc. currently makes up the bulk of partner store locations with close to 800 touchpoints.

Over a million new depositors have been onboarded through May BPI Dito partner stores since the program began, according to the bank.

Mr. Limcaoco said the May BPI Dito program also helps decongest its branches, allowing their staff to focus on other financial services such as customer education and product selling.

“The idea is we decongest the branches. Maybe 50% of our transactions in the branches are still deposits and withdrawals. Ideally… we move the day-to-day transactions to a partner store, and branch becomes more like a place where we can educate and raise awareness.”

BPI Chief Financial Officer Eric Roberto M. Luchangco added that the program also lowers expenses for the bank amid lower maintenance costs and as it allows them to increase their touchpoints in areas with no bank branches.

“This really allows us to go out to places where our customers are, even if the volume isn’t really there. It’s more cost efficient for us, which means that makes it more efficient for us to serve the customer. And we can therefore serve them in places where we wouldn’t otherwise. And so, that’s really the way that we reach out to them. We can cover more areas and be more present for our consumers.”  

NO FEES
Mr. Limcaoco added that their move to make InstaPay and PESONet transfers permanently free would help the bank attract more customers while complying with the Bangko Sentral ng Pilipinas’ (BSP) latest circular mandating financial institutions to adopt reasonable, fair, and market-based pricing for digital fund transfers.

“We think this just generates a lot more customers, a lot more activity, [which helps] our ability to understand what the customer does. Therefore, we can see — if a customer stays with us — we can see what kind of services we can give them,” he said.

The BSP circular said fees charged for person-to-person e-payments across banks, e-wallet operators, and other payment service providers should not be materially different from fees within the same institution, and that any difference in pricing should mainly reflect fees paid to the network switch operator.

“The only difference is the fee you pay to the switch that facilitates the interbank payment. And for InstaPay, that’s P1.50. So, as far as the BSP is concerned, my interpretation of what the BSP is saying is that you can charge anything you want, but the difference has to be P1.50,” Mr. Limcaoco said. “So, would you rather us charge P13.50 and P15, or zero and P1.50? I think most of them said zero and P1.50. And then we said, why would we still charge P1.50?”

“We think this is great for financial inclusion. We think if banks are willing to give [intrabank transfers] for free, why wouldn’t you give the P1.50 also for free? That’s my view. I don’t know if the other banks would agree. But I think the BSP is very clear that the difference has to be the switch fee. We’ll see where that goes.”

BPI’s net income rose by 1.7% year on year to P16.92 billion in the first quarter. Its shares closed at P98.55 apiece on Wednesday, up by P2.55 or 2.66% from Tuesday’s finish. — Aaron Michael C. Sy