BSP in talks with Lyka to work out OPS license

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is in talks with social media platform Lyka as it pursues the company’s application process as an operator of payment system (OPS) with the regulator.

BSP Governor Benjamin Diokno said the regulator is in touch with Lyka Philippines as it complies with the provision of   Republic Act 11127 or the National Payment Systems Act (NPSA) and BSP Circular 1049.

Lyka, launched in the Philippines by Hong Kong-based Things I Like in 2019, allows its users to purchase, exchange, and use gift cards in electronic mode (GEMs) as payment for goods and services. It has 10 million registered users and is being endorsed by well-known celebrities and influencers in the country.

An OPS refers to 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.

The BSP last July ordered the revocation of the OPS provisional certificate of registration awarded to Digital Spring Marketing and Advertising Inc. and directed the company to cease-and-desist from performing cash-in service, merchant accreditation and settlement process on behalf of Lyka or Things I Like.

Lyka chief executive officer Ryan Baird announced last Oct. 12 that the social media platform was setting up an office in the Philippines as it pursues its registration application with the central bank.

The BSP circular provides for the rules and regulations on the registration of OPS and the BSP to have oversight of the payment system it operates 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 regulator also issued Circular   1127 on the governance policy for OPS as part of the phased-in implementation of the NPSA that supports the BSP’s strategic objectives under the Digital Payments Transformation Roadmap to foster digital payments adoption and financial inclusion.

The circular provides the regulatory expectations on the governance arrangements and standards for BSP-registered OPS, and the criteria for qualification and grounds for disqualifications of individuals elected or appointed as directors or officers of an OPS.

Under BSP regulations, OPS include 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.

Diokno said a total of 175 OPS are registered with BSP and were issued certificates of registration as of Nov. 12.

The BSP chief said the regulator also continues to conduct surveillance activities and assess the material prudential implications of the rising use of Axie Infinity.

“The BSP will also work closely with other regulators under the financial sector forum to strengthen cooperative oversight of fintech innovation  and to continue to craft adequate regulations covering virtual assets and virtual asset service providers,” he said.