Local payment system operators—like GCash, BDO Pay and Paymaya—are expected to become more efficient and safer for users with the central bank’s new regulations governing these transaction channels.
In an online briefing, Bangko Sentral ng Pilipinas (BSP) Gov. Benjamin Diokno said the issuance of the governance policy for Operators of Payment Systems will also result in a more stable financial system in the country. “The BSP instituted the governance policy for [payment system operators] to foster sound risk management practices in the national payment system,” he said.
“With the remarkable progress in digitalizing retail payments, the BSP deems it important to remain vigilant of the risks associated with these developments and to implement minimum standards to properly manage them,” he added. The BSP recently issued Circular No. 1127 on the governance policy for payment system operators as part of the phased-in implementation of Republic Act No. 11127 or the National Payment Systems Act. The law governing payment system provides a regulatory framework which supports the BSP’s strategic objectives under the Digital Payments Transformation Roadmap 2020–2023 to foster digital payments adoption and financial inclusion. Diokno said the BSP pursues these goals while ensuring that payment systems operate in a safe, efficient and reliable manner.
The circular provides the regulatory expectations on the governance arrangements and standards for BSP-registered payment systems, and the criteria for qualification and grounds for disqualifications of individuals elected or appointed as directors or officers of such an organization.
Consistent with the BSP’s proportional approach to payment system oversight, the central bank chief said more stringent requirements would apply to operators of designated payment systems in view of the potential of such systems to pose systemic risks to the financial system.
The circular provides a period of six months for payment systems operator to comply with the provisions of the issuance, taking into consideration the adjustments needed in the governance arrangements of these firms.
Under BSP regulations, payment system operators include cash-in services, 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.