BSP Reminds Lyka to Register, Says It Is Closely Watching All Payment Operators

By Shiela Bertillo

The Banko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno urged social media and e-commerce platform Lyka to secure a payment operator license from the central bank “to keep things in order” in an interview with ANC News.

Lyka is a platform launched in the Philippines by a Hong Kong-based company that allows users to convert likes and the number of activities or posts by a user into Gift cards in Electronic Mode (GEMs) that they can use to pay for goods and services at partner merchants of the app.

“It’s one of the things that we sighted because it continues to operate without a license and they need the imprimatur of the central bank to keep things in order,” Diokno told ANC. (Read More: LYKA to Comply With BSP Requirements After Being Ordered to Cease Operating)

Last July, BSP ordered the social media platform to stop its operations as it is not registered as an operator of payment system (OPS) as prescribed under Republic Act 11127 or the National Payment Systems Act (NPSA). It also suspended the provisional OPS licensed of Digital Spring, the marketing arm of Lyka in the Philippines.

According to Diokno during a briefing last month, Lyka was directed to suspend activities as an OPS and was invited to apply for registration with the BSP before it is allowed to continue operating.

Based on Republic Act No. 11127 or The National Payment Systems Act (NPSA), entities operating a payment system are required to comply with the provisions of the law, as well as rules under BSP Circular No. 1049 which provides the guidelines for OPS registration; OPS that are required to register, but are found to be operating without registration, will be directed to comply with the circular’s registration requirements. Failure to comply will result to an order to stop operations until immediate action is taken to register with the BSP.

Registration of an OPS allows BSP to supervise the payment system to ensure that it functions safely, efficiently, and reliably by itself, consistent with the central bank’s objectives of consumer protection and financial stability.

The central bank earlier reminded the public to transact only with BSP-registered OPS, which are listed on its website.

Conversely, The BSP remains wary when it comes to cryptocurrencies since virtual money is “volatile,” Diokno said. 

“The thinking of central banks in the world is that it’s not a good way of managing monetary policy in the sense that it’s volatile,” he said.

The BSP has been consistent in its messaging about cryptocurrencies being volatile. In an interview with Rico Hizon on CNN, Diokno reiterated that they have the potential to transform the delivery of financial services, but it’s also cognizant of its risks. 

“They have really the potential to revolutionize the delivery of financial services and further support of financial inclusion, Therefore it makes them very vulnerable for use in money laundering and terrorism financing. So you have to be wary about that. As a regulator, we should be wary about that,” Governor Diokno said.

Source: ABS-CBN News

This article is published on BitPinas: BSP Reminds Lyka to Register, Says It Is Closely Watching All Payment Operators