BancNet celebrates 27 years of reliable e-payments in the Philippines

In Photo: CTBC Bank: first to obtain complete BancNet certification as EMV compliant

The advent of modern technologies has undeniably brought so much comfort to the lives of people.

At the tip of his or her fingertips, one is able to shop, make payments, or receive money in his bank account anywhere or right at the comfort of his home. Advancement in technology such as the Internet and other networks plus the modern tools and gadgets have made business transactions faster and more efficient – whether it’s a simple enrollment in the school, booking a concert or movie or buying a promo fare ticket, buying your favorite meal or paying your credit due.

Today, more than ever, many individuals make payments electronically rather than in person. Hundreds of electronic payment systems have also been developed to provide secure Internet transactions. Electronic payment systems have also been developed such as credit and debit cards; electronic cash; and point- of-sale (POS) terminals.

Thanks to BancNet which started it all in July 1990.  Eight banks, PCI Bank (later Equitable PCI Bank, now Banco de Oro), Security Bank, Chinabank, RCBC, Allied Bank, Metrobank, International Corporate Bank (now part of UnionBank) and CityTrust Banking Corp. (now part of BPI) joined forces and formed BancNet to interconnect their ATMs. With more members joining, BancNet introduced the point-of-sale system to serve the retail payment requirements of cardholders in 1994.

In 2002, BancNet started its online banking and payment gateway system followed by Interbank Funds Transfer, reportedly the first consortium-run automated transfer facility in the region. The product allows real-time, online transfer of money among the members of BancNet using either the payment gateway, the ATM or a cardholder’s mobile phone.

As the sole ATM network in the Philippines today and a key player in the implementation of the National Retail Payment System (NRPS), BancNet is at the forefront of facilitating e-payments across the country.

In 2016, BancNet grew its membership to 126, adding BTI Payments ( Philippines), Inc., which is an independent ATM deployer that is controlled by Banktech, Inc., an operator of over 2,000 ATMs in Australia. Its ATM and POS networks expanded; the former increased from 18,506 to 19,894, while the latter from 115,630 to 141,465. The number of active cardholders rose from 53.8 million to 59.8 million, consequently bumping up the volume of switched transactions by 7.55%, from 548.13 million in2015 to 589.54 million last year. BancNet was able to maintain an average host availability rate of 99.97% and a transaction completion rate of 98.21%, even though massive transactions had to be processed.

Easy payments

With a stronger financial position, larger ATM and POS networks, more cardholders and higher number of members, BancNet has become more committed to enhancing its services. The company has expanded the number of billers, the ones who process bills of different kinds, in its system. There are now 96 billers in all, and one can pay all of them through BancNet Online, a reliable and secure Internet banking portal, and about 26 of them via automatic teller machines. BancNet Online also accepts Social Security System (SSS) contributions and loan amortizations from overseas Filipino workers, the self- employed, farmers, fishermen, non-working spouses and voluntary members of the social insurance program.

A related facility, called e- Gov, makes it possible for private employers to conveniently remit contributions and loan repayments online, eliminating the hassle of going to the offices of government agencies like SSS and Philippine Health Insurance Corporation (PhilHealth). e- Gov also allows employers to set up multiple bank accounts, to address funding requirement, and print a payment slip that includes a six- digit electronic receipt number. BancNet is also the only electronic payment network accredited by the BIR for its Electronic Filing and Payment System or eFPS.

Since 2013, BancNet has been the payment gateway for the Philippine National Single Window, the national government’s electronic trading program. Payment of trade-related permits, licenses and certification for a number of government agencies can now be made via BancNet. The following year, the company started processing of online payments of fees for the registration of business names as part of the electronic payment facility for business name registration project of the Department of Trade and Industry (DTI), done in partnership with various organizations.

NRPS

Among the most significant developments for BancNet in the past year was the release by the Bangko Sentral ng Pilipinas (BSP) of the framework for its vision of a NRPS. Under the NRPS, a Payment System Management Body (PSMB) governs a network of automated clearing hubs (ACH) for different types and modes of payment, each with a clearing switch operator (CSO).

In early 2017, the BSP identified two priority ACHs to be created immediately: low-value, real-time credit push and batch electronic funds transfer. BancNet was designated as the CSO for low-value real-time credit push.

In preparation for this, BancNet built the infrastructure for InstaPay, the country’s Interbank Funds Transfer (IBFT) credit platform and application. This platform supports real-time crediting of funds from a bank’s sending account to another bank’s receiving account. It enables the sending of sender and recipient information to address the Know Your Customer (KYC) requirements of the BSP.

SECURE PAYMENTS

To enhance the security of online payments, BancNet developed a Two-Factor Authentication (2FA) system for its web portal, BancNet Online. 2FA is an added layer of security on top of the ATM PIN that requires the keying in of other information that only the cardholder knows. These are his user name, password, and a one-time PIN. This system assures that even if the cardholder’s card data and his PIN are skimmed at an ATM, his account cannot be accessed by the fraudster on the BancNet website. The 2FA ensures that the person transacting is the real owner of the account.

In 2016, BancNet set up the complete initial production infrastructure specification of its Business Support System (BSS), a back-office system intended to handle partner management, settlement and billing. It will replace the existing Bank Reconciliation and Tracking System (BARTS). The BSS was developed tailor-fit for BancNet’s continuing thrust towards operational efficiency and the need for more flexibility to meet complex business requirements now and in the future.