The Philippines central bank, Bangko Sentral ng Pilipinas (BSP), has mandated that the social media platform Lyka to suspend its activities as an operator of payment systems (OPOs) as area officials crack down on FinTech rules.
In a press release, the central bank said Lyka has been invited to register with the BSP under the National Payment Systems Act (NPSA). Lyka, based in Hong Kong, operates in the Philippines and offers consumers the opportunity to buy, trade and use gift cards in electronic mode (called GEMs).
The monetary board of the central bank determined that Lyka’s activities constitute an OPS and thus has to register with the BSP. Lyka has said it will cooperate and register with the BSP as an OPS, per the release.
Aside from registration, the BSP said in the release that any entity that works as a payment system must adhere to the guidelines under NPSA and BSP Circular 1049, per the release. The circular requires that entities register when they are found to be operating without registration and will be mandated to comply with the Circular’s registration requirements.
“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” according to the release.
Last year in October, the government of the Philippines was mulling whether to curtail the number of digital banks that operate in the country. At odds were concerns whether digital banks should be subjected to the mandates that legacy financial institutions contend with.
Bangko Sentral ng Pilipinas Gov. Benjamin Diokno said at the time that the digital-first mindset is accelerating as a result of the digital first economy. At the time, banks around the world were stepping up the adoption and promotion of digital banking due to the COVID-19 pandemic.