The Bangko Sentral ng Pilipinas (BSP) has temporarily suspended the local activities of social media and e-commerce app, LYKA of Hong Kong, pending its compliance with the BSP order to register as an operator of payment system (OPS).
BSP Governor Benjamin E. Diokno said Friday that LYKA’s social media platform in the Philippines, which allows its users to purchase, exchange, and use Gift Cards in electronic mode or GEMs as payment for goods and services, is decidedly an OPS.
As an OPS, Diokno said LYKA is required to register with the BSP. The operators of Lyka have already expressed their willingness to register with the BSP as an OPS.
“Today (July 23), the BSP has directed Lyka to suspend activities as an OPS and invited the company to apply for registration with the BSP before it is allowed to continue with its OPS activities. On a recent development, the operators of Lyka have expressed their willingness to register as an OPS,” said Diokno.
The BSP regularly issues public advisories reminding financial consumers to transact only with BSP-registered OPS which are listed on its website. The BSP defines OPS as cash-in service providers, bills payment service providers, and entities such as payment gateways, platform providers, payment facilitators and merchant acquirers that enable sellers of goods and services to accept payments, in cash or digital form.
“To confirm if an OPS is duly registered, the BSP publishes a list on the BSP website which the public may visit,” Diokno said. “In order to protect the public interest, the public is encouraged to immediately report unregistered OPS to the BSP through our Payment System Oversight Department.”
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. The BSP has oversight of 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.
Based on Circular No. 1049, 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. “This is without prejudice to other enforcement actions that may be taken against the OPS and its directors/officer and/or employees in accordance with the BSP’s authority over payment systems under RA No. 7653, as amended (The New Central Bank Act) and the NPSA,” said the BSP.