Operator of Payment System

Operator of Payment System

On July 23, 2021, “LYKA” a popular social media application used by numerous influencers and celebrities in the Philippines was suspended by virtue of the order by the Bangko Sentral ng Pilipinas (“BSP” for brevity). In common Filipino culture and fashion, the users of the well-known application aired their critique due to the suspension of “LYKA” which particularly impeded their means of living. To clear the current smoke and for us to give light again to this shining gem, we should look into the law.

R.A. 11127 otherwise known as “The National Payment Systems Act” was signed into law by President Rodrigo Roa Duterte on October 30, 2018. The law particularly supports the efficiency and performance of the Bangko Sentral ng Pilipinas to maintain a safe, efficient mode of payment and settlement systems. Section 4(l) of the abovementioned law defined an “operator” to wit: 

“(l) operator – any person who provides clearing or settlement services in a payment system or defines, prescribes, designs, controls or maintains the operational framework for the system;”

R.A. 11127 The National Payment Systems Act”

To further define an Operator Payment System (“OPS” for brevity), BSP Circular No. 1049 provides that an OPS is one who performs any of the following functions:

“(a) Maintains the platform that enables payments or fund transfers, regardless of whether the source and destination of accounts are maintained within the same or different institutions; 

(b) Operates the systems or network that enables payments or fund transfers to be made through the use of payment instrument; 

(c) Provides a system that processes payments on behalf of any person or the government; and

(d) Performs such other similar activities, as may be determined by the Monetary Board.”

Section 10 of R.A. 11127, also provided that all OPS should be registered with the BSP, to wit: 

“SEC. 10. Registration of Payment System Operators. – 

Within six (6) months from the effectivity of this Act, all operators of payment systems as defined under Section 4 of this Act shall register with the Bangko Sentral. Operators of payment systems, which shall commence business or operations subsequent to the effectivity of this Act, shall register with the Bangko Sentral in such manner and within such reasonable period as may be prescribed by the Monetary Board.”  

WHY IS AN OPERATOR PAYMENT SYSTEM REQUIRED TO REGISTER? 

This is to ensure the safety and protection of the people using OPS’s application, product and services in the Philippines because once an OPS is registered with the BSP, the latter can then monitor if the OPS continuously follows their objectives, rules and guidelines. This also entails that the users have freely chosen this OPS  and consented to use their social media application, product and services. 

Entities that provide Operator Payment Systems have already accumulated an abundant amount of users and customers. Moreso, today when a majority of businesses and employers have shifted to online transactions. It is then the duty of all OPS operating and existing in the Philippines to register with the Bangko Sentral ng Pilipinas, to ensure that all activities enjoyed by the people of the Philippines are adequately protected.

SOURCES:

  1. https://www.bsp.gov.ph/PaymentAndSettlement/RA11127.pdf
  2. https://www.bsp.gov.ph/PaymentAndSettlement/FAQ_OPS_Registration.pdf
  3. https://www.bsp.gov.ph/PaymentAndSettlement/COR.pdf
  4. https://www.bsp.gov.ph/Regulations/Issuances/2019/c1049.pdf

Written by: Lester Tan

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