PH central bank orders social media platform Lyka to suspend operations

LYKA-Bangko-Sentral-Ng-Pilipinas-Suspend

Manila, Philippines – The nation’s central bank, Bangko Sentral ng Pilipinas (BSP), has issued a statement requesting the suspension of operations of Lyka, a Hong Kong-owned social media platform, as well as inviting them to be registered with the central bank as an Operator of Payment System (OPS).

Lyka operates under the premise of allowing its users to purchase, exchange, and use gift cards in electronic mode or ‘GEMs’ as payment for goods and services.Said platform is designed for both individuals and businesses that encourage engagement and content creation by compensating users for time and creativity.

Based on these premises, BSP has ascertained that these activities make Lyka an OPS and is thus required to register with the BSP, which is needed before it is allowed to continue with its OPS activities.

In response, Lyka has expressed their willingness in registering as an OPS, BSP confirms.

As a word of reminder, BSP reminds entities operating a payment system to comply with the requirement under the National Payment Systems Act (NPSA) and BSP Circular No. 1049 to register with the BSP. Said central bank circular provides for the rules and regulations on the registration of Operators of Payment System. Registration of an OPS allows 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.

In addition, OPS that are required to register, but are found to be operating without registration, shall be directed to comply with the Circular’s registration requirements. Those that fail to comply may be ordered to stop operations until immediate action is taken to register with the BSP.

“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,” the central bank said in a press statement.

The BSP also reminds the public to transact only with BSP-registered OPS that are listed in the BSP’s website. According to them, an OPS may be 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.

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