The Bangko Sentral ng Pilipinas (BSP) has officially approved the application of Zed Financial PH Inc. (ZFPI), formerly Zed Philippines Inc., to operate as a non-bank credit card issuer (NBCCI).
In a BSP Circular Letter (CL-2024-040), signed by BSP Deputy Governor Chuchi G. Fonacier on July 19, 2024, the BSP has authorized ZFPI to “establish and operate” as an NBCCI as per Monetary Board Resolution No. 703 which was approved on May 19, 2022.
“(The BSP has) granted authority, and approved the request of (ZFPI) to establish and operate as non-bank credit card issuer,” said Fonacier, adding that the financial firm is registered with Securities and Exchange Commission (SEC) to engage primarily in the credit card business and to operate as an NBCCI as of May 8 this year.
Fonacier said the BSP issued ZFPI the corresponding Certificate of Authority to Operate as NBCCI last June 10, 2024 and it commenced operations last June 25.
BSP defines a credit card as any card or other credit device, including its virtual representation, that is intended for the purpose of obtaining money, property, goods or services on credit. A credit card issuer refers to a bank or non-bank that offers the use of its credit card.
The BSP continues to limit how credit card issuers are charging cardholders in terms of monthly interest rate and fees on transactions.
At the moment, there is a a three percent monthly ceiling on credit card interest rate and finance charges, or 36 percent per year.
Meanwhile, the monthly add-on rates that credit card issuers can charge on installment loans remains a maximum rate of one percent while the maximum processing fee on the availment of credit card cash advances is still P200 per transaction.
The BSP is currently reviewing if it will extend the ceiling which lapsed last February.
Since the BSP reviews the interest rate ceiling every six months, it is able to monitor and assess if cardholders are coping with the increased payments on their credit card balances.
The ceilings on credit card transactions are temporary relief measures. It was given for cardholders’ reprieve during the pandemic and to allow them affordable access to credit.