Rules governing licensing of merchant payment operators out

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has issued the application guidelines for financial companies that want to become operators of platforms for processing of payments on behalf of merchants.

In a memorandum dated Jan. 14, the BSP said all payment operators such as the Bayad Centers must electronically submit their applications for merchant acquisition licenses.

All communications related to the application must also be transmitted electronically.

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Merchant acquisition refers to the service of accepting and processing payment transactions on behalf of a merchant under an agreement, resulting in a transfer of funds to the merchant.

Having such a license means a financial firm can provide the means to accept payment instruments, as well as collect, secure, transmit and process transaction information.

At the same time, owning such a permit means that an operator can also give support services related to the payment.

Under the new memo, the BSP said all applications must be accompanied by the required documents and information. If the application is denied or withdrawn, an applicant may file a new one after six months.

Framework

The BSP released the guidelines to enforce its earlier circular issued last year, which established standards and best practices to safeguard customer funds and protect sellers’ rights when dealing with operators of merchant payment platforms.

Those standards were meant to mitigate risks related to settlement, operations, information technology, antimoney laundering, counterterrorism financing, counterproliferation financing of weapons of mass destruction and end-user protection.

The framework, which seeks to smoothen flows for financial transactions, was also seen to enhance end-user confidence in digital payments by laying down governance, risk management and reportorial requirements.

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