In the dynamic landscape of financial services, the Philippines underscores the pivotal role of payment systems, recognizing their significance in achieving the country's monetary policy objectives. The National Payment Systems Act designates the Bangko Sentral ng Pilipinas (BSP) as the regulatory authority, emphasizing its central role in shaping the nation's financial infrastructure.
Who Needs an OPS License and Why?
Operators of payment systems (OPS) stand at the forefront of maintaining platforms for payments or fund transfers. OPS registration covers a broad spectrum, including entities not currently supervised by the BSP. Independent ATM Deployers, Bayad Centers/bill payment aggregators, online merchants/billers, and payment gateways fall within this scope when they perform operator functions relative to a payment system.
Registration of entities operating as OPS is mandated by BSP Circular No. 1049. This requirement aligns with the central bank's goal of ensuring the safety, efficiency, and reliability of payment systems in the Philippines.
The registration empowers the BSP with oversight authority, allowing them to regulate all payment systems comprehensively. This ensures adherence to RA No. 11127 and reinforces consumer protection and financial stability goals.
Who Are the Operators of Payment Systems (OPS)?
The landscape of payment systems involves a diverse set of entities that play crucial roles. OPS include:
- Cash-in service providers
- Merchant acquirers
- Payment facilitators
- Payment gateways
- Platform providers
- Bills payment service providers
- Entities facilitating payments for goods and services
For the public's safety, it's emphasized to engage only with BSP-registered OPS.
Activities Covered Under the OPS License
An OPS license extends its coverage to a comprehensive array of activities, including:
- Maintaining platforms for payments or fund transfers.
- Operating computer application systems for payments.
- Setting rules for payments or fund transfers.
- Enabling customer funding of accounts with cash or its equivalent.
- Linking accounts with other financial institutions.
- Operating systems or networks for payments through payment instruments.
- Providing network infrastructure for payments and financial services.
- Enabling transactions between account holders and third parties.
- Transferring payment information between participating institutions.
- Offering services to multiple financial institutions for payments or fund transfers.
- Facilitating acceptance of payment instruments by various entities.
- Processing payments on behalf of individuals, businesses, or the government.
- Receiving payments on behalf of sellers, service providers, or creditors.
- Collecting funds from the public and transmitting them to sellers or creditors.
- Allowing payments to multiple establishments or creditors.
All OPS that have not commenced operations must register within one month from the start of their operations. Exceptions exist where registration is required before commencement, such as when a regulator or government agency necessitates BSP action or when OPS offers remittance services.
General Requirements for OPS License Application
- Incorporate as a Stock Corporation:
- Your OPS must be incorporated as a stock corporation specifically for operating a payment system.
- Conduct a self-assessment to determine if your activities align with OPS functions outlined by the Monetary Board.
- Type of Activities: The BSP does not differentiate requirements based on payment system types (e.g., payment gateway, processor, aggregator).
- Foreign Ownership: No restrictions on foreign ownership for OPS registration.
- Application Submission:
- Submit an Application for Registration (Form 1) to the BSP within one month of starting OPS activities.
- Required Documents:
- Provide a Business Plan detailing your business model and target markets.
- Include a copy of the business registration/permit indicating the line of business from the relevant local government.
All OPS that have not commenced operations must register within one month from the start of their operations. Exceptions apply when registration is mandatory before commencement, as per regulatory or government agency requirements for BSP action or when OPS provides remittance services.
- Application Fee:
- Submitting the registration application incurs no fee. However, entities identified as OPS under Circular No. 1049, issued a COR, are subject to a PHP 20,000 registration fee. Banks and EMIs designated as OPS and issued COR are exempt from this fee.
Evaluation and Approval
Successful online registration results in the automatic issuance of a PCOR. For banks and EMIs, this is issued within three days. The PCOR is generally valid for three months from the date of issuance. The applicant is notified of the application's outcome before the PCOR's expiration.
While the BSP does not conduct a system or network infrastructure review during COR approval, it retains the authority to do so as part of its comprehensive oversight.
AML and Fraud Considerations
OPS providers are required to adhere to a risk-based approach for Anti-Money Laundering and Countering the Financing of Terrorism. Financial inclusion products may have flexible ID requirements.
Details in Money Transfers:
OPS activities may involve money or value transfer services, emphasizing the importance of sender/beneficiary details in payment messages.
Foreign Service Providers:
OPS registration extends beyond Philippine-based companies, encompassing foreign service providers operating for Philippine customers.
For the OPS license application form, visit the BSP website.
In summary, acquiring an OPS license in the Philippines requires a lot of details. However the process has been streamlined by the BSP. From understanding the broad spectrum of activities covered to adhering to specific requirements, entities contribute to the stability and reliability of the Philippines' payment systems. Staying informed, submitting the necessary documents, and actively participating in the regulatory landscape collectively shape the future of payment systems in the country.
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