BSP Approves Entry Of New Credit Card Issuers
The Banko Sentral ng Pilipinas (BSP) has greenlit new credit card issuers to enter the Philippine market. This move is part of the new rules released to implement a new law regulating the industry.
In a statement, the central bank said they have completed implementing rules and regulations (IRR) for Republic Act (RA) No. 10870 or the Philippine Credit Card Industry Regulation Law. They also added that opening up the market to a wide range of players can lead to more transparent and competitive interest rates, innovative products and improved services. BSP also noted that there are over eight million credit cards issued in the Philippines. With this initiative, they are expectating that the roster will grow amid robust economic growth and a shift towards digital payments.
The rules drafted by the BSP seek to address “key customer concerns,” including the disclosure on the amount and the computation of fees and charges. These also provide for safeguards against unfair collection practices, immediate posting of payments, confidentiality of consumer data, and the expeditious resolution of complaints.
The newly implemented rule in particular requires that all finance charges and card-related fees to be placed on application forms, contracts and billing statements. Card issuers are also mandated to give “ample notification” to clients before fees are changed. Additionally, the new rules also require collection agents to observe “good faith” in demanding payments from card holders, saying that they shall observe “fair and reasonable conduct” for customers including those in default.
Crediting payments using cash, check or debit cards made via accredited payment centers should also be posted on the same day by card issuers. The rules also make permanent the rule that requires due dates falling on weekends or holidays to be moved to the next business day. On data privacy, customer information can only be shared to third parties only if the cardholder has given consent.
Debts incurred via credit cards stood at P299.196 billion in 2017, representing 3.5% of total loans granted by the banking system, according to latest available BSP data. Of the amount, P14.242 billion is at risk of default.