I’ve had a habit for quite some time when it comes to settling debts or transferring funds among friends. I would usually first ask them, “may bank account ka ba, pwede ko na lang ba i-transfer dun?” (“do you have a bank account so I can just transfer the funds there?”) Then the next thing we’ll be asking for is each other’s bank account numbers, assuming we’re on the same bank. Tough luck if we don’t have a common set of banks. I’ll pay in cash instead.

Thousand peso bills on hand

It’s a sad reality that for majority of Filipinos, they’d still rather pay using cash, forgoing electronic methods because it’s not trustworthy enough. I know of a handful of people who would still rather line up in bayad centers to pay for their utility, telco, or water bills — even though nowadays almost every bank has their own e-banking or online banking site. Similarly, for payments, people would still rather line up in bank branches to do over-the-counter (OTC) deposits to pay obligations to other people (i.e., debts or payment for items bought). In this day and age where e-banking is accessible on computers and smartphones, it should be less of an issue to do these transfers in a cashless way. Do I even need to emphasize how bad queues can get inside bank branches? #MayForever sa loob ng bangko!

Now, the problem is when you and your contact do not have the same bank. It goes back to that queue nightmare! Thankfully, the Bangko Sentral ng Pilipinas (BSP) recently introduced InstaPay fund transfer.

InstaPay fund transfer logo Philippines

InstaPay

Interbank Fund Transfers

Ever heard of the term inter-bank fund transfer (IBFT)? As a former programmer in a local bank, I thought it was possible before. Well technically, it was, but it came at a very hefty fee because transferring money across different banks didn’t come cheap. With InstaPay, the same idea is now not only generally cheaper (“generally” — more on this later), but it’s also instantly credited as well! Like real-time!

coins stacked in foreground with clock in background

Before InstaPay, if one reeeeeally had to deposit money to another bank account (i.e., to a bank where she isn’t an account-holder), she could ask another friend of hers for an arrangement where she transfers money to his account, then he transfers the same amount to that other bank at which he is an account-holder. This is an alternate option for those who absolutely abhor waiting in banks; however, it would only work if your friend is cool with that kind of arrangement.

InstaPay Benefits

With InstaPay, it makes the entire process a lot shorter by bypassing the friend and you making the transaction directly from your own bank account! Not to mention that you can do the fund-transfer (FT) at your most convenient time, and also, you won’t be limited to just transferring funds to banks that your friend has accounts with (read: your friend isn’t a millionaire).

It also allows you to top-up virtual wallets (e-money) like PayMaya in case you don’t have time to drop by outlets that support topping up. And just like your preferred loading station, the transfer is done as soon as your bank’s online banking app confirms the transaction!

You can transfer up to 50,000 per transaction. You can perform InstaPay multiple times — do remember thought that your own bank probably also maintains its own maximum transfer limits (per day).

Since its launch in April 2018, more and more BSP-supervised financial institutions (BSFIs) have supported InstaPay.

Which banks support InstaPay fund transfer?

As of 31 January 2020, the BSP has listed that most financial institutions in the Philippines already support InstaPay. These institutions both support sending and receiving funds. A handful of commercial and rural banks, however, only support receiving funds at the moment.

Below is a quick walkthrough how to perform InstaPay fund transfer in the AUB online banking mobile app.

  • AUB menu with InstaPay Fund Transfer selected
  • Fund Transfer Mode displaying AUB, InstaPay, and PesoNet options
  • Details provided in InstaPay Fund Transfer screen
  • InstaPay Fund Transfer verification details
  • Confirmation page of InstaPay Fund Transfer
  • SMS confirmation

Be aware though that InstaPay doesn’t come for free! Just like withdrawing money from other bank ATMs, these banks supporting sending via InstaPay charge a fee. These banks’ InstaPay fees vary, and can vary quite widely!

Some of the above-mentioned banks have made their fees known, as indicated below. Keep in mind that InstaPay fund transfer fees are only charged against the sender — the recipient gets the entire fund without any deductions.

(Update: Due to the COVID-19 pandemic, most Philippine banks are temporarily offering InstaPay for free, while the Enhanced Community Quarantine (ECQ) is in effect.)

InstaPay service fees per institution

Some banks’ service fees are indicated below. For others, you may want to refer to their respective official websites.

stacked peso coins
  • AUB: ₱10
  • BDO: ₱100 50
  • Chinabank: ₱10
  • Gcash: Free!
  • PayMaya: Free!
  • PNB: ₱30
  • PSBank: ₱10
  • Unionbank: ₱10

The BSP does not dictate the maximum amount that each bank chooses to charge for each InstaPay transaction. So we’re pretty much at the mercy of the participating banks, especially if they’re the bigger ones. Personally, I can tolerate a ₱10-charge as it is not so different from a typical ATM withdrawal. It would run quite counter to the BSP’s goals of financial inclusivity if banks will charge a high fee for this — what’s the point if you will not entice your customers with a low enough fee? Then they would just stick it out by doing “the usual way” of OTC deposits and the like.

Then again, nowadays, it’s not just banks who are able to offer InstaPay. E-money issuers like Gcash, PayMaya, and Hello Pag-IBIG also now offer InstaPay — some offering it for free! This should enable more people to avail of the service and avoid unnecessary transfer costs.

Going to a cash-lite economy

With the help of the BSP, initiatives like InstaPay can influence Filipinos’ banking habits. We have grown accustomed to queueing everywhere, but “going digital” can change the way we do things. I wish that banks take this as a challenge for them to ride along the change so all of us can benefit, hopefully soon!