The Bangko Sentral ng Pilipinas (BSP) said Friday, Dec. 29, that it will now accept applications for exemption from the moratorium on the entry of new electronic money issuers (EMI) by non-bank financial institutions (NBFIs).
Earlier this month, the BSP released the memo extending for another year or until Dec. 15, 2024 the ban on new EMI-NBFIs’ license.
“Applications for exemption from the moratorium may be granted under the conditions set out in BSP Memorandum No. M-2021-064 dated November 2021, involving new business models; unserved, targeted niches; and/or new technologies,” said the BSP.
“These exceptions are intended to modify the current landscape in the e-money industry with entry of new players that have new business models and new technologies and shift in focus to unserved and underserved markets. Interested applicants that meet the abovementioned exceptions and offer strong value propositions for e-money services may apply through the regulatory sandbox framework under BSP Circular No. 1153 dated 5 September 2022,” said the BSP.
The BSP said it has initiated the two-year EMI-NBFI licensing moratorium in 2021 to “ensure that its resources are managed and mobilized judiciously in a manner that promotes financial stability and inclusive growth, and advances the development of innovative e-money solutions that offer strong value propositions.”
The central bank supervises 44 BSP-licensed EMI-NBFIs. There are also four EMI-NBFI applications submitted under the sandbox framework.
The BSP defines e-money as electronically-stored cash in an instrument or device such as cash cards, prepaid cards, stored value cards, or any digital wallet accessible via mobile phones or other access device, and other similar products within the scope of electronic payments. All e-money accounts are non-interest-bearing and non-deposit transaction, and pre-funded by customers.
The BSP is also retaining its selective approval of new licenses if it falls under these exemptions such as new business models, or if it is under the regulatory sandbox approach, among others.
The BSP official said any EMI-NBFI applicants that meet any of the required exemptions and “offer strong value propositions” to provide EMI services may apply through the regulatory sandbox framework under BSP Circular No. 1153.
The BSP first imposed the moratorium two years ago and it was intended only to last for two years which was enough time for BSP to study on how to selectively lift the ban to “keep out the bad guys.”
The central bank closed the EMI application window for both banks and non-banks to allow the BSP to monitor the EMI sector and to ensure financial stability.
Earlier this year, the BSP issued a new EMI circular which raised the required minimum capital for an e-money firm with a 12-month large-scale operations of P25 billion or more.
The minimum capital for these operations is now P200 million from the previous P100 million. Meanwhile, the minimum capital requirement for small-scale EMIs is P100 million.
All banks and NBFIs have one year to comply with the revised rules. EMIs also have new classifications as EMI-Banks and EMI-NBFIs which used to be EMI-Others.