Lyka closure order affirmed after BSP denies its registration bid via proxy firm
MANILA, Philippines—Social media-based payments platform Lyka — which became popular on the back of celebrity endorsements — will remain shuttered after the central bank affirmed its closure order and denied its bid to be registered with the regulator through another company.
In a statement on Friday, the Bangko Sentral ng Pilipinas said it denied the request of Digital Spring Marketing and Advertising Inc. to be registered as the operator of the Lyka/Things I Like Co. Ltd (TIL) payment system.
The BSP upheld the cease and desist order issued against Digital Spring in July of this year, reiterating that Lyka/TIL and not Digital Spring should register with the BSP.
A ranking central bank official earlier told the Inquirer that the entire process of closing down Lyka — which previously counted as endorsers celebrities Ivana Alawi, Pia Wurtzbach, Coco Martin and Nadine Lustre, among others — and asking it to register its operations was also meant to help regulator identify the firm’s true beneficial owners.
“Think of a [payment systems operator] as a pilot who must personally obtain a flying license to prove that they possess the necessary skills and training to safely operate a passenger aircraft”, BSP Deputy Governor Mert Tangonan said.
“Digital Spring applying for registration, instead of Lyka/TIL itself, is like saying the airline ticketing office can apply for a flying license on behalf of the pilot. It is the pilot who must apply for the license,” he added.
The BSP transmitted a letter to Digital Spring on its denial of the firm’s requests for reconsideration on Friday.
Because of this, the central bank said the stoppage order against the firms, dated July 23, 2021, is “affirmed and shall remain effective until Lyka/TIL properly registers as an OPS in accordance with law and regulations.”
To date, Lyka/TIL has yet to register with the central bank as a payments operator.
Lyka/TIL allows users to purchase, exchange, and use “Gift cards in Electronic Mode” — or “GEMs” — as payment for goods and services. These activities make Lyka/TIL a payment systems operator and, therefore, must be registered before continuing with these activities.
The BSP said it enables safe, convenient and cost-saving digital payments services to the public for their payment needs.
In the process, BSP oversees payment system operators to protect consumers, merchants, banks, and other payment system participants.
For its continuous protection, the central bank reminded the public only to use the payment services of a registered company.
A payment systems operator may be cash-in service providers, bills payment service providers, and entities such as payment gateways and merchant acquirers that enable sellers of goods and services to accept payments in cash or digital form.
To confirm if a payment system operator is duly registered with the BSP, the public may view the list at: https://www.bsp.gov.ph/PaymentAndSettlement/COR.pdf.
