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Business

BSP revokes license of Lyka’s marketing arm

Lawrence Agcaoili - The Philippine Star
BSP revokes license of Lykaâs marketing arm
Facebook photo of Lyka app
LYKA / Facebook via Interaksyon

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has revoked the provisional license of the marketing arm of Lyka in the Philippines. Lyka was earlier ordered to halt its online payment operations.

BSP Deputy Governor Mamerto Tangonan issued Circular Letter 2021-060 informing BSP-supervised financial institutions (BSFIs) about the cancellation of the provisional certificate of registration of Digital Spring Marketing and Advertising Inc.

Social media platform Lyka was launched in the Philippines by the Hong Kong-based Things I Like Co. Inc. in 2019, allowing its users to purchase, exchange and use Gift cards in Electronic Mode or GEMs as payment for goods and services.

The BSP issued an Operator of Payment System (OPS) provisional certificate of registration in favor of Digital Spring last July 21. It also operates Lyka Philippines in cooperation with EPlayment Corp., which was awarded an OPS license by the BSP in January.

BSP Governor Benjamin Diokno earlier announced the decision of the Monetary Board ordering Lyka to cease and desist from operating a payment system in the Philippines without registration as mandated under Republic Act 11127 or the National Payment System Act (NPSA) and Circular 1049 issued in 2019.

The regulator also directed Digital Spring to cease and desist from performing cash-in service, merchant accreditation and settlement process, among others, on behalf of Lyka until the latter properly registers as an OPS with the central bank in accordance with the NPSA and other applicable implementing rules and regulations.

“The Monetary Board further ordered the cancellation of Digital Spring’s provisional certificate of registration, without prejudice to other regulatory actions, orders and directives that BSP may undertake pursuant to its powers under the NPSA,” Tangonan said.

After the suspension order, the controversial social media platform vowed to fulfill its obligations with partner merchants as Lyka Mall, Lyka Grocery, Lyka Games would continue to advance in order to fulfill the needs of users.

“Rest assured that Digital Spring will continue to fulfill its obligations with its partner merchants in parallel to its ongoing compliance with BSP’s requirements,” Lyka said in a statement issued earlier.

Lyka has been flooded with encashment requests from partner merchants including hotel chains, restaurants, resorts, jewelry stores and other retail outlets since the BSP ordered the suspension of its operations last July 22.

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