The Bangko Sentral ng Pilipinas (BSP) has ordered social media platform Lyka to stop its operations as an Operator of Payment System (OPS). The central bank has also invited the company to apply for registration before continuing with its activities.
Lyka is a digital community in which users share their interests by posting a photo or a video. Users will be rewarded with GEMS (Gift card in Electronic Mode) when they upload a photo or a video on this platform. Also, every time a Lyka user engages with other people’s posts, both parties will earn a certain amount of GEMS.
“It has come to our knowledge that Lyka, a social media platform launched in the Philippines by a Hong Kong-based company, allows its users to purchase, exchange, and use Gift cards in Electronic Mode or GEMs as payment for goods and services,” said BSP Governor Benjamin Diokno at a virtual press briefing, in a report by GMA News.
With that said, Diokno mentioned that the central bank ordered Lyka to suspend its activities as an OPS, urging them to register first.
The suspension of Lyka’s OPS operations is in accordance with the Republic Act No. 11127 or The National Payment Systems Act (NPSA). Besides, the BSP Circular No. 1049 provides for the Rules and Regulations on the Registration of Operators of Payment System.
Under BSP Circular No. 1049, 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. Otherwise, those who fail to comply may be ordered to stop operations until immediate action is taken to register with the central bank.
According to BSP, the registration of an OPS enables the central bank to oversee 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 financial stability.
Under BSP regulations, OPS includes 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.
Furthermore, the central bank encourages the public to transact only with BSP-registered OPS that are listed on the BSP’s website.
Meanwhile, Diokno also revealed that the operators of Lyka have already expressed their willingness to register with the BSP as an OPS.
See BSP Website for more details. pic.twitter.com/GnQNMKu2u7
— Benjamin Diokno (@GovBenDiokno) July 19, 2021
Source: BSP via GMA News