Banks are dropping transfer fees. Here’s why it took so long.

MANILA, Philippines – The P10 or P15 transfer fee for moving money between banks is finally disappearing, but why is it only happening now?

As of Friday, July 17, at least 14 universal and commercial banks had waived both InstaPay and PESONet fees for individual customers, according to the Bangko Sentral ng Pilipinas (BSP). The list includes the big players: BDO, BPI, Metrobank, UnionBank, Landbank, PNB, Security Bank, RCBC, China Bank, and EastWest.

The zero-fee wave followed BSP Circular No. 1238, which changed how financial institutions may charge for person-to-person transfers. Basically, if sending money to another account within the same bank is free, then sending it to a different bank should just reflect the additional switch cost. For InstaPay transfers, that switch cost is around P1.50.

Since most banks already make transfers within their own systems free, the old P10 to P25 fee became harder to justify. Banks could theoretically begin charging for same-bank transfers. Many instead decided that collecting such a small interbank fee was not worth irritating customers.

Why now?