DRAFT_PPMI Prospectus_v0

PHILIPPINE PAYMENTS MANAGEMENT INC. X` PROSPECTUS

Making Payments Process Easy and Secure While being confronted by technological and social challenges, the National Retail Payment System (NRPS) framework, under the BSP leadership took off which then paved way for the formation of the country’s Payment System Management Body (PSMB). Various initiatives began to shape up when the PSMB Charter was supported by key players in the industry and gradually brought forward the Philippine Payments Management, Inc. (PPMI). Its subsequent incorporation marked the turning point of our NRPS journey. PPMI acts as a catalyst for innovative reforms in the payments industry and leads the way for the rise for a level-playing field for payments participants. The presence of the PPMI strengthens the NRPS as an industry-led body by carrying out its principles and look after the good of the payment industry in the country. Alongside BSP, PPMI is dedicated to working together with you, our industry partner, and strengthen our commitment for the Philippines to have an interconnected electronic retail payment system—making payments easier and more secure for every Filipino. The Philippine Payments Management Incorporated (PPM) received valuable support and contributions from its stakeholders and partners in developing this material. We would like to thank in particular the team of Payment System Oversight Department (PSOD) of the Bangko Sentral ng Pilipinas (BSP), United States Agency for International Development (USAID), Rural Bankers Association of the Philippines (RBAP), Bankers Association of the Philippines (BAP).

IN THIS PROSPECTUS I. INTRODUCTION …………… 5 II. MISSION & VISION …………… 8 III. DRIVERS & PILLARS …………… 10 IV. STRUCTURE & GOVERNANCE …………… 20 23 V. MEMBER INSTITUTIONS & …………… RESPONSIBLITIES 26 VI. MEMBER REQUIREMENTS …………… 30 30 VII. CONTACT …………… VIII. REFERENCES ……………

INTRODUCTION INTRODUCTION

I. INTRODUCTION Increasing number of people are demanding faster, more convenient and flexible means II. MISSION & of payments that come with differentiated financial products to meet a wide range of VISION 58%financial needs. III. DRIVERS & of 70% Filipino respondents that have PILLARS gone cashless for at least a few days cited convenience and safety (48%) are e6-5b%anakreinogn IV. STRUCTURE the main drivers of digital behavior. & GOVERNANCE and checks their accounts V. MEMBER once a week using digital COMPANIES platforms rather than going to a physical branch. 71% VI. REQUIREMENTS CAWOANRTEAOCFTLESS VII. CONTACTS PAYMENT The financial industry has to move swiftly in coherence to supply the growing demands of VIII. REFERENCES the payment sphere especially the system with which it flows ensuring convenience, safety and cost-efficiency.

I. INTRODUCTION The financial sector performs indispensable functions for society at large one of which is II. MISSION & facilitating payments for varying payment needs including payments for goods and services, VISION transfer of money domestically and internationally and payments without having to access physical funds. These demands can be met through an individual baseline approach but to III. DRIVERS & ensure that players play well to ensure facilitation of accurate and secure payments between PILLARS counterparties, provide cost-competitive payment mechanisms (physical and electronic) to support domestic / international trade and economic activity and provide non-cash IV. STRUCTURE interoperable or multi-player payment methods for the exchange of goods and services, tax & GOVERNANCE and others require a collective and cooperative approach. V. MEMBER Interconnection of banks and non-bank institutions in the Philippines in terms of payments COMPANIES enhances the efficiency of the transfers of funds and bill payments, enables banks, individuals, corporate and Government entities to benefit from this vital web through the VI. enhancement and streamline movement of funds in the country across all sectors which REQUIREMENTS promotes a more efficient and proactive financial services sector and economy as a whole. VII. CONTACTS The Philippine Payments Management Incorporated (PPMI) supports such collective and cooperative approach to the payments field among financial institutions to contribute to the economy and industry’s growth, to individual institution’s growth and make payments easy and secure for every Filipino. The organization promotes and cultivates innovative reforms in the payments industry as emerging trends and issues bring change at a pace that is likely to intensify, hence PPMI captures the very future of financial servicing especially in terms of the payments sphere. We bring financial institutions to work together as traditional financial institutions and non-traditional fintech firms, big and small have begun to understand that collaboration may be the best path to long-term sustainability and growth. PPMI acts as a conduit and central point of contact of the industry and the industry’s regulating body, the Bangko Sentral ng Pilipinas (BSP) for regulating, lobbying and addressing payment-related issues. The organization helps provide structure on agreements between multiple players in the financial industry to promote a more inclusive growth of each individual institutions and the industry itself. We provide the platform for financial institution on sharing of best practices, challenges, ideas and ways forward. This prospectus will provide financial institutions with information about the association and analyses that will guide them through the decision-making process. This document will likewise aid potential members navigate on the association’s structure including value proposition, drivers and pillars, process and requirements. VIII. REFERENCES

MISSION & VISION

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DRIVERS & PILLARS

I. INTRODUCTION Strategic drivers are things that shape the organization’s operating strategies and II. MISSION & Philippine Payments Management, Inc. (PPMI) is committed to championing in the arena VISION of competitive and accessible payments. DRIVER 1 : THE FUTURE IS DIGITAL AND SO ARE INTER-CONNECTED PAYMENTS III. DRIVERS & PILLARS Governments, companies, and international organizations and individuals waste time and resources making and receiving inefficient cash payments. Digital payments can be made quickly and efficiently, which decreases overall costs. When Mexico digitized and India’s fuel subsidy program, which IV. STRUCTURE centralized payments, the cost to is the world’s largest cash transfer & GOVERNANCE distribute wages, pensions, and program, has already saved $2 Billion social welfare dropped by 3.3% - by paying cooking gas consumers directly into their bank accounts. or nearly US$ 1.27 Billion. 3.3% $2 Billion V. MEMBER 40 mins COMPANIES In Niger, recipients of mobile transfers VI. reduced the travel time to a cash-out REQUIREMENTS point by 40 minutes compared to VII. CONTACTS relying on manual cash distribution. VIII. REFERENCES Integrating digital payments into the economies of emerging and developing nations addresses the critical issues of domestic resource mobilization. Digitizing payments also drives inclusive economic growth and individual financial empowerment. Financial inclusion has been broadly recognized as critical in reducing poverty and achieving inclusive economic growth. Greater access to financial services for both individual and firms may help reduce income inequality and accelerate economic growth according to World Bank.

I. INTRODUCTION On the other hand, payment transfer flexibility especially from one financial institution to II. MISSION & another provides benefits to both end-users and companies. The current silo and stand- VISION alone retail payment set-up creates inefficiencies as there are multiplication of resources such as network, terminals as well as support services, high barriers to entry for new banks and is therefore challenging for both the institutions and the government. The following enumerates the perceived benefits of operating in an inter-connected payments system. BENEFITS OF INTER-CONNECTED PAYMENTS Improves utility of payment III. DRIVERS & instruments and PILLARS Promotes healthy competition on wider customer reach convenience for end-users. (banked & unbanked). Increases financial viability of Reduces inefficiencies due IV. STRUCTURE service offerings by reducing to overlapping or limited & GOVERNANCE fixed costs and unlocking coverage. economies of scale Reduces sunken investment costs V. MEMBER which can negatively impact COMPANIES adoption and usage. DRIVER 2: THE PHILIPPINES AND ITS BURGEONING ECONOMY The Philippines is one of the most dynamic economies in the East Asia and the Pacific VI. region. With increasing urbanization, a growing middle-income class, and a large and REQUIREMENTS young population, the Philippines’ economic dynamism is rooted in strong consumer demand supported by vibrant labor market and robust remittances. Business VII. CONTACTS activities are buoyant with notable performance in the services sector including the business process outsourcing, real estate, and finance and insurance industries. Sound economic fundamentals and a globally recognized competitive workforce reinforce the growth momentum. Having sustained an average annual growth of 6.3 percent between 2010-2017 from an average of 4.5 percent between 2000-2009, the country is poised to make the leap from a lower-middle income country with a gross national income per capita of US$3,660 in 2017 to an upper-middle income country (per capita income range of US$3,896 – 12,055) in the near term. VIII. REFERENCES

I. INTRODUCTION These factors contribute to a promising digital payments landscape especially in terms of II. MISSION & how businesses tailor-fit their products and services to consumers to address varied and VISION demanding needs effectively and efficiently. Growing Middle- Large and Young III. DRIVERS & Income Class Population PILLARS Rapid Urbanization IV. STRUCTURE & GOVERNANCE Growth in account Growth in Increase in remittance V. MEMBER opening e-commerce flows COMPANIES Increase in digital banking adoption DRIVER 3: THE REVOLUTION OF THE FINANCIAL SERVICES INDUSTRY VI. REQUIREMENTS As changing economic factors transform business environment from competition to collaboration, cooperation between banks and fintech firms of today is paving the way for VII. CONTACTS VIII. REFERENCES even more exponential growth in terms of payments investment and innovation. The financial industry has come to realize that an institution can’t operate solely on its own. The reinvention of the financial industry to meet 21st century needs has resulted not only in the merger of finance and technology but on services that each can offer. In the Philippines, the financial industry comprises largely of banks while other players sharing the supply pie are Microfinance NGOs (MF NGOs), Electronic Money Issuers (EMIs), Cooperatives and Non-Stock Savings and Loan Associations (NSSLAs) but since the advent of the digital world, the emergence of revolutionary solutions offered by other players in the industry prompted a shift on provider preference. In the era where the basic funds transfer had spun from “anyone” to “any institution” spells a compelling competitive advantage for financial institutions and brings forth benefits not just to companies and consumers but to the economy as a whole.

I. INTRODUCTION Rationale for collaboration is the ability to bring strengths of companies together to II. MISSION & create the best offer than either unit could bring on their own. An increasing percentage VISION of consumers are willing to use financial products offered by non-traditional firms – especially where the experience is superior to that offered by legacy organizations. III. DRIVERS & PILLARS It is expected that demand for digital products and services will only increase as more consumers become familiar with new digital offerings. This is especially true for younger, IV. STRUCTURE middle-income to upper-income consumers, who have grown up with or got & GOVERNANCE accustomed to digital devices. Some financial institutions are on “cashless” platform in most of their services while a few are on “invisible banking” or “digital banking” where the basic financial services are offered in full digital. These fuel and call for a more interconnected services among companies. There are also regulatory developments catalyzing the way the financial industry does its business, especially on payments front. Regulators are intervening to foster competition, protect consumer rights and promote payments efficiency and innovation through use of developing technologies. By such intervention, they are acting as a catalyst for game-changing developments. IN FOCUS V. MEMBER COMPANIES One example is PSD2, which has established the framework for far-reaching change by mandating VI. ‘open banking’ across the EU which is expected REQUIREMENTS to dramatically alter the payments landscape and payments ecosystem. Open banking, which facilitates third- party access to customer information and accounts held by banks, will allow non- traditional players to provide new services. The customer must give permission for an authorized third party to access his or her data, and there are stringent security requirements. Another aspect of open banking is payment initiation; this can be done by the payment service provider (PSP) on behalf of the customer (retail or wholesale). Open banking is a global trend, most notably in the EU but there are also initiatives VII. CONTACTS at different stages in Australia, Singapore and Hong Kong. In the UK, the nine largest current account providers developed standards and implemented open banking in response to instruction from the country’s Competition and Markets Authority ahead of the implementation of PSD2. SAMPLE REGULATION The Bangko Sentral ng Pilipinas, in line with its thrust of ensuring the efficiency of VIII. REFERENCES payment systems in support of inclusive economic development has approved a policy requiring the adoption of a National Quick Response (QR) Code Standard for payments.

I. INTRODUCTION This Standard is necessary for ensuring interoperability of QR-enabled payment and II. MISSION & financial services. The use of the single QR will also drive digital integration. VISION These and a lot of factors have revolutionized contemporary financial services to a whole new breed of offers and continuously shape the future of the industry. III. DRIVERS & PILLARS Pillars are foundations that provide strength and support for the drivers. PPMI’s existence is anchored on Bangko Sentral ng Pilipinas’ National Retail Payment System regulation. IV. STRUCTURE PILLAR : THE NATIONAL RETAIL PAYMENTS SYSTEM (NRPS) & GOVERNANCE The National Retail Payment System (NRPS) is a flagship program of the Bangko Sentral ng Pilipinas (BSP). It is a policy and regulatory framework that aims to establish a safe, V. MEMBER efficient, reliable and inter-operable retail payment in the Philippines. COMPANIES BSP developed and promulgated the NRPS in 2015 and subsequently issued BSP Circular 980 which provides the different requirements and guidance on how the Philippine VI. Payments Industry, comprising all BSP Supervised Financial Institutions (BSFIs) that REQUIREMENTS directly participate in payment clearing, is to exercise governance and risk management over retail payments. VII. CONTACTS VIII. REFERENCES

I. INTRODUCTION Benefits of NRPS for Businesses II. MISSION & VISION NRPS promotes competition in terms of quality, availability, and wide array of electronic payment products and services, III. DRIVERS & innovation that introduces safety, speed, and convenience to PILLARS encourage usage, creation of new business models adapted to the needs of target markets, and customer pricing that are IV. STRUCTURE reasonable and market-based. & GOVERNANCE Benefits of NRPS for Customers V. MEMBER COMPANIES NRPS likewise facilitates and supports the delivery of a wide range of financial products that cater to the needs of all users, especially the VI. REQUIREMENTS small-value, high frequency payers of the low-income segment. As more end-users or consumers avail of electronic payment services, the growth VII. CONTACTS VIII. REFERENCES in transaction volume will help achieve economies of scale, which may further bring down cost to the consumers. The NRPS envisions every Juan and Maria to have easy access to financial services, have accounts to make payments, receive or transfer funds to other accounts anytime, anywhere, at a reasonable price, from any digital device. NRPS promotes, among others, interoperability—the state when end-users or consumers are able to transfer funds from one account to another account in any participating BSP supervised financial institution (bank or electronic money issuer). By enabling interoperability, sustained adoption of electronic payments is plausible as electronic transactions are made more convenient. Hence, NRPS core principles are (1) separation of payment system governance from clearing operations; (2) fair and level-playing field of payment system participants; (3) reasonable, market-based pricing of payment services; and (4) increased inter-operability, among others. THE PAYMENT SYSTEMS MANAGEMENT BODY (PSMB) With retail payments as its scope, the BSP regulates the payment system or its appointed Payment Systems Management Body (PSMB), an organization with delegated responsibilities from the BSP. The cooperation of participants is sought to move the consolidation of the governance of various domestic retail payment clearing schemes, existing and to be created into a single and formalized industry self-governance body. The PSMB is comprise of representatives from different stakeholders, manages risk and self regulates members through the creation of rules, risk monitoring, auditing and compliance and the development of a clear overall regulatory framework.

I. INTRODUCTION The body shall also adhere to a sound corporate governance practice. This ensures that II. MISSION & all interests are adequately represented and have a voice in the governance of the VISION country’s retail payment system. III. DRIVERS & THE PHILIPPINE PAYMENTS MANAGEMENT INC. (PPMI) AS THE PAYMENT SYSTEM PILLARS MANAGEMENT BODY IV. STRUCTURE A self-governing organization run by key players in the financial industry, the Philippine & GOVERNANCE Payments Management Inc. (PPMI) was recognized as the official Payment Systems Management Body (PSMB) of the Philippines under the National Retail Payment System V. MEMBER (NRPS) Framework of the BSP on January 12, 2018. COMPANIES The Philippine Payment Management, Inc. (PPMI) as the Payment System Management Body (PSMB) by the appointment of the BSP recognizes the authority of the BSP as the primary overseer of the retail payment system given its critical role in the financial infrastructure as envisioned under the NRPS framework. The primary role of the PSMB is the formulation, issuance, and enforcement of governance framework comprising of principles, policies, rules and guidelines on clearing “off us” transactions, including sound risk management, non-discriminatory membership and efficient dispute resolution. Moreover, PSMB governance shall cover all payment clearing processes. No bilateral clearing between participants shall be allowed so as to gain visibility of all clearing results. IN FOCUS AUTOMATED CLEARING HOUSE (ACH) VI. REQUIREMENTS An Automated Clearing House (ACH) is a multilateral legally binding agreement that lays down the clearing and participation rules for a particular payment VII. CONTACTS stream to facilitate electronic fund transfers among its participants. Payment streams that are covered by a multilateral ACH promotes greater efficiency, better risk management and interoperability compared to those that are covered by separate bilateral agreements as most often practiced. An ACH, however, does not necessarily prescribe specific features of payment products that use a clearing arrangement. CLEARING SWITCH OPERATORS (CSOs) It the entity contracted by an ACH to operate the clearing switch as per the ACH VIII. REFERENCES agreement. CSOs act as a central domestic point where all electronic payment messages will be routed from one bank to another. Under the NRPS rule, CSO operations shall be limited to clearing and other services that do not compete with services offered by PSMB members.

I. INTRODUCTION Functions of the PPMI II. MISSION & The PPMI oversees the environment by which financial institutions cooperate to VISION enable payments across accounts in different financial institutions in alignment with the policies and strategies of the NRPS Framework. III. DRIVERS & PILLARS As specified in BSP Circular No. 980, PPMI shall perform the following functions with respect to its members: IV. STRUCTURE & GOVERNANCE • Ensure compliance by PPMI members with criteria, standards and rules promulgated and adopted by its Board of Directors; V. MEMBER COMPANIES • Set policies and standards on clearing activities of its members; • Standardize retail clearing agreements across payment streams, which VI. REQUIREMENTS may include minimum guidelines on the content of  service level agreements with Clearing Switch Operators (CSOs); VII. CONTACTS VIII. REFERENCES • Manage members' conformance to multilateral retail clearing agreements; • Review applications for establishment of Automated Clearing Houses (ACH) and to  accordingly approve the formation thereof; • Prescribe policies and rules to promote visibility of retail clearing and resulting settlement positions to manage risks resulting from or associated with clearing and settlement activities; • Set forth policies, rules and/or standards to ensure that no anti- competitive activities occur in clearing  operations of PSMB members; • Promote fair access to the payment system amongst its members; • Enable effective and efficient interface and interoperability using shared and resilient infrastructure; • Establish a dispute resolution mechanism for its members; • Provide a clearing environment that will support  payments innovation and the adoption of  new business models by the payment system  participants. Under the NRPS framework, there are two (2) priority Automated Clearing Houses (ACHs): (1) Batch Electronic Fund Transfer (EFT) Credit ACH to be called “PESO Net” and (2) Real Time Low Value Push ACH to be called “InstaPay” Industry players are expected to actively participate in one or both of these ACHs. The Batch EFT Credit ACH or PESO Net facilitates fund transfer from one (1) account (payer) to one or several accounts (payee/s). The fund transfer and/or payment instructions are processed in bulk and cleared at batch intervals with each payee receiving the full value in their account.

I. INTRODUCTION Under the NRPS framework, there are two (2) priority Automated Clearing Houses II. MISSION & (ACHs): (1) Batch Electronic Fund Transfer (EFT) Credit ACH to be called “PESO Net” VISION and (2) Real Time Low Value Push ACH to be called “InstaPay” III. DRIVERS & This ACH supports payments that are recurring and are not time critical, thus serving PILLARS as a channel for government collections and disbursements and an alternative to the overwhelming use of checks by businesses. IV. STRUCTURE & GOVERNANCE Meanwhile, the Real Time Low Value Push or InstaPay ACH facilitates real-time electronic fund transfers by enabling the payer to send instruction/s to his financial V. MEMBER institution to irrevocably transfer funds held in his account to the account of a payee, COMPANIES who receives the full value immediately. The service is available 24/7 and credit to account of beneficiary is instant. VI. REQUIREMENTS The Philippine Clearing House Corporation (PCHC) is the designated CSO for PESONet for a two- year transitory period beginning from the time of PesoNet’s launch while BancNet for Instapay. How does an ACH Work? Customers instruct their financial institution to send credit instructions to other financial institutions via online banking, mobile banking or over-the-counter transaction. They need to provide the payees’ financial institution, account number, and amount. The credit instruction is transmitted by the financial institution to the respective Clearing Switch Operators of the ACH (PesoNet or Instapay CSO). The funds are settled in the respective financial institutions demand deposit accounts held in Bangko Sentral ng Pilipinas (BSP) through BSP’s Philippine Payments and Settlement System (PhilPaSS). Upon settlement, the beneficiary’s or payee’s financial institution will credit the payee's account. PAYER’S BANK CLEARING SWITCH PAYER’S BANK PAYER’S ACCOUNT VII. CONTACTS VIII. REFERENCES BRANCH OPERATOR CUSTOMER PAYER’S BANK PAYER’S BANK’S PhilPASS E-CHANNELS PESO NET & INSTAPAY ACH (ONLINE & MOBILE)

STRUGCOTVUERREN&ANCE

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I. INTRODUCTION Automated Clearing House (ACH) Agreement Coverage II. MISSION & VISION PPMI facilitates the establishment of ACH working groups and oversee the development and implementation of clearing rules by the ACH Participant Group (ACH-PG). III. DRIVERS & PILLARS An ACH-PG is a sub-group recognized by the PPMI in which direct participants in a specific ACH interact and prepare, approve, implement, execute and oversee the rules and IV. STRUCTURE agreements applicable to an ACH and according to which the ACH operates its clearing & GOVERNANCE activities. V. MEMBER • The business rules governing the clearing and settlement for that ACH, that COMPANIES all the signed-up participants must abide by. VI. • Risk management measures for an ACH (clearing and settlement risk REQUIREMENTS management, operational and technical risks). VII. CONTACTS • Authorization for representative (probably the Chief Executive Officer (CEO) of the PPMI) to sign ACH-PG approved agreements on behalf of the ACH participants, such as for CSO appointment and agreement with the PhilPaSS. The ACH agreement specifically authorizes the ACH-PG to develop, approve and contract these agreements, subject to ratification by the ACH-PG subject to its charter and that of the PPMI. • Rules on pricing/fees for clearing between ACH participants i.e. the ‘switching fee’ that is paid to the CSO by the two participants who are party to a clearance. • Rules on business continuity planning. • Authorization of the entity that is appointed as the CSO to account obligations created through clearing, establish settlement positions on the participants’ behalf and submit the positions to the PhilPaSS operator on the participants behalf. • Authorization of the PhilPaSS operator to execute transactions to settle their settlement positions on presentation of the positions by the CSO. • An allowance for additional participants to sign-on to the ACH, provided that they meet the ACH participation criteria, without the need that all the existing ACH members resign the ACH agreement (an onboarding provision). VIII. REFERENCES

MEMBER COMPANIES

I. INTRODUCTION Members that are either in Peso Net or Instapay ACH based on Bangko Sentral ng Pilipinas as of II. MISSION & October 31, 2019. VISION 1 Al-Amanah Islamic Invest.Bank 36 Land Bank of The Philippines 2 AllBank (A Thrift Bank), Inc. 37 Malayan Bank Savings and Mortgage Bank 3 Asia United Bank 38 Maybank Phils.,Inc. 4 Australia New Zealand Banking Group 39 Mega International Commercial Bank Co., III. DRIVERS & Ltd. Ltd. PILLARS 5 Bangkok Bank Public Co. Ltd. 40 Metropolitan Bank And Trust IV. STRUCTURE 6 Bangko Mabuhay (A Rural Bank), Inc. 41 Mizuho Bank, Ltd. – Manila Branch & GOVERNANCE 7 Bank of America, Nat'L. Ass 42 MUFG Bank, Ltd 8 Bank of Commerce 43 Omnipay, Inc. 9 Bank of China 44 Partner Rural Bank (Cotabato), Inc. 10 Bank of The Philippine Islands 45 Paymaya Philippines, Inc. 11 BPI Direct Banko, Inc. A Savings Bank 46 Phil. Bank Of Communication 12 BPI Family Savings Bank 47 Philippine Business Bank, Inc., A Savings Bank 13 Cebuana Lhuiller Rural Bank, Inc. 48 Philippine National Bank 14 BDO Network, Inc. 49 PNB Savings Bank 15 BDO Unibank, Inc. 50 Philippine Savings Bank V. MEMBER 16 BOF, Inc. (A Rural Bank) 51 Philippine Trust Company COMPANIES 17 CIMB Bank Philippines, Inc. 52 Philippine Veterans Bank 18 China Banking Corporation 53 Producers Savings Bank Corporation 19 China Bank Savings, Inc. 54 Quezon Capital Rural Bank, Inc. 20 Citibank, N. A. 55 RCBC Savings Bank, Inc. 21 CTBC Bank (Philippines) Corporation 56 Rizal Commercial Banking Corporation 22 DCPay Philippines, Inc. 57 Robinsons Bank Corporation VI. 23 Deutsche Bank 58 Security Bank Corporation REQUIREMENTS 24 Devt. Bank of The Philippines 59 Shinhan Bank 25 Dungganon Bank (A Microfinance Rural 60 Sterling Bank Of Asia, Inc. (A Savings Bank) Bank), Inc. Sumitomo Mitsui Banking Corporation - 26 East-West Banking Corporation 61 Manila Branch 27 Equicom Savings Bank, Inc. 62 Sun Savings Bank, Inc. VII. CONTACTS VIII. REFERENCES 28 First Consolidated Bank, Inc. 63 The Standard Chartered Bank 29 G-Xchange, Inc. 64 Union Bank Of The Philippines 30 HK and Shanghai Banking Corporation 65 United Coconut Planters Bank 31 Industrial Bank Of Korea 66 UCPB Savings Bank, Inc. United Overseas Bank Limited, Manila 32 ING Bank, N.V 67 Branch 33 Isla Bank (A Thrift Bank), Inc. 68 Wealth Development Bank, Corp. 34 JP Morgan Chase Bank 69 Yuanta Savings Bank Philippines, Inc. 35 Keb Hana Bank - Manila Branch

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MERMEBQEURISRHEIMPENTS

I. INTRODUCTION PPMI membership is open to direct clearing organizations in the Philippines, both banks II. MISSION & and non-bank EMIs, especially all BSFIs. Direct clearing participants are those that meet VISION the following criteria: • Financial institution duly licensed by the BSP. III. DRIVERS & • Engage in holding funds of customers. PILLARS • Authorized by BSP to offer e-banking / e-money services to the public. • Active participant in at least one ACH. • Meet technical and operational standards of the ACHs they are participating in. • Settle clearing results with BSP’s PhilPaSS either directly or through sponsoring bank. Application Process IV. STRUCTURE & GOVERNANCE BSFIs and non-bank EMIs who wish to become a member should undergo a self- assessment on the eligibility following participation criteria. Once eligibility is determined by the BSFI, an expression of interest shall be made to PPMI for application process guidance. A set of documentary requirements and joining fee shall be filed and paid to PPMI for the V. MEMBER application. COMPANIES . YOUR PRE-MEMBERSHIP PROCESS GUIDE VI. REQUIREMENTS Membership PPMI provides Financial PPMI reviews Financial VII. CONTACTS VIII. REFERENCES inquiry can be information on institutions secures completeness of institutions sent by banks / membership a Confirmation of perform self- non-bank EMIs Eligibility from BSP submitted assessment for process and and submit other requirements, to PPMI. application endorses to PPMI ACH requirements to documents to participation for inquiring PPMI. Board for submission to institution. membership BSP PSOD. approval.

I. INTRODUCTION YOUR PRE-AUTOMATED CLEARING HOUSE PARTICIPATION II. MISSION & GUIDE Philippine Payment Management Inc. VISION PPMI reviews completeness of submitted documents for ACH participation. III. DRIVERS & PILLARS ACH Steering Committee PESONET ACH PPMI with ACH Steering IV. STRUCTURE INSTAPAY ACH Committee Chair issues & GOVERNANCE completion of self-assessment certification addressed to the CSO (PCHC for PesoNet ACH and BancNet for Instapay ACH). Bank and Non-Bank EMIs V. MEMBER Submits to PPMI signed ACH agreement then submit to CSO the COMPANIES PPMI certification on completion of self-assessment. Discusses with respective CSO ACH connectivity. Financial institutions also ensures participation in an ACH (either in PesoNet or Instapay) within one (1) month from joining PPMI. Application Requirements VI. REQUIREMENTS A set of membership application requirements should be submitted to PPMI either online at [email protected] or offline at Philippine Payments Management, Inc., 19th VII. CONTACTS floor, Citibank Tower, 8741 Paseo De Roxas, Makati City, Metro Manila, Philippine, 1226: VIII. APPENDICES • Copy of latest Articles of Incorporation and By-Laws. • Copy of Certificate of Authority from Bangko Sentral ng Pilipinas (BSP) whichever is applicable: o To operate as a bank o To operate as an Electronic Money Issuer (EMI) • Coy of Electronic Banking Authority / Approval from Bangko Sentral ng Pilipinas (BSP). • Secretary’s Certificate authorizing application and designating authorized representative and alternate. • Confirmation of Eligibility to be a member of PPMI issued by BSP Payment Oversight Department (PSOD). • Copy of latest audited Financial Statement. .

I. INTRODUCTION Membership Fees II. MISSION & VISION In order to promote secure and reliable digital payments in the country and serve the interests of our members, membership fees are necessary. A one-time membership fee and an annual membership fee will be collected: A. One-Time Joining Fee III. DRIVERS & 1. For Universal Banks, Commercial Banks and Electronic Money Issuers (EMIs) PILLARS o Pay one-time joining fee of P150,000.00 2. For Rural Banks and Thrift Banks o One-time joining fee depends on the institution’s asset size: Asset Size Joining Fee IV. STRUCTURE Less than P1 Billion P150,000.00 & GOVERNANCE P500 Million to P1 Billion P75,000.00 P500 Million P50,000.00 B. Annual Assessment Fee V. MEMBER o Depending on the value of transactions over 24 months pro-rated COMPANIES across all participants. This fee paid 30 days after receipt of assessment notice. VI. REQUIREMENTS VII. CONTACTS VIII. REFERENCES

CONTRAECFTESRE&NCES

I. INTRODUCTION REFERENCES II. MISSION & VISION Alliance for Financial Inclusion (AFI). (August 2017). National Retail Payment System to Support Financial Inclusion. Available: https://www.afi- III. DRIVERS & global.org/sites/default/files/publications/2017-10/DFS_GN_29_stg4.pdf PILLARS Bangko Sentral ng Pilipinas (BSP). (October 17, 2019). The Bangko Sentral Pursues IV. STRUCTURE Adoption of a National QR Code Standard for Payment. Available: & GOVERNANCE http://www.bsp.gov.ph/publications/media.asp?id=5182 V. MEMBER Better Than Cash Alliance (BTCA). Why Digital Payments?. Available: COMPANIES https://www.betterthancash.org/why-digital-payments VI. European Commission. (2015). Payment Services Directive (PSD2). Available: REQUIREMENTS https://ec.europa.eu/info/law/payment-services-psd-2-directive-eu-2015-2366_en VII. CONTACTS VIII. REFERENCES Porteous and Le Sar. (2013). Introduction to National Payments System. Available: https://www.digitalfrontiersinstitute.org/resources/item/introduction-to-national- payment-systems-npsi Society for Worldwide Interbank Financial Telecommunication (SWIFT). (2019). Brave New World: Be Ready for Europe’s New Payment Architecture. Available: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=2ahU KEwi7pvzpgMPlAhXCZSsKHSGkAwUQFjABegQIARAC&url=https%3A%2F%2Fwww.s wift.com%2Fresource%2Ftransformation-european-payments- landscape&usg=AOvVaw2XFbQGCqBYKiWPSh2k4c31 Tomilova, Thomas and Lauer, World Bank. (July 27, 2016). Championing Interoperability for Financial Inclusion: Carrot or Stick?. Available: https://blogs.worldbank.org/psd/championing-interoperability-financial-inclusion- carrot-or-stick Visa. (July 26, 2018). Seventy Percent of Filipinos Have Gone Cashless. Available: https://www.visa.com.ph/about-visa/newsroom/press-releases/seventy-per-cent- of-filipinos-have-gone-cashless-visa-survey.html World Bank. (November 25, 2019). Country Overview: Philippines. Available: https://www.worldbank.org/en/country/philippines/overview World Economic Forum (WEF). (August 2013). The Role of Financial Services in Society: A Multi-stakeholder Compact. Available: http://www3.weforum.org/docs/WEF_FS_RoleFinancialServicesSociety_Report_20 13.pdf

PHILIPPINE PAYMENTS MANAGEMENT, INC. 8813-6874 • [email protected] • 19th floor, Citibank Tower, 8741 Paseo De Roxas, Makati City, Metro Manila, Philippine, 1226 © PPMI 2019