MANILA, Philippines — Lyka, a social media app, is committed to service encashment requests from merchants despite experiencing a deluge of requests from different partner establishments after the Bangko Sentral ng Pilipinas earlier ordered it to halt its online payment operations.
Informed sources said Lyka continues to service partner merchants within the committed seven-day period, contrary to some merchants’ claims that encashment requests would take 30 days.
The Bangko Sentral ng Pilipinas (BSP) has revoked the provisional license of the marketing arm of Lyka in the Philippines, Digital Spring.
Monetary authorities said the activities of Lyka mandate it to register with the central bank under Republic Act 11127 or the National Payment Systems Act (NPSA).
Launched in 2019, Lyka allowed its users to purchase, exchange, and use gift cards in electronic mode or GEMs as payment for goods and services in different industries in the country, but mostly in the food, retail and hospitality sectors.
Following the BSP’s orders, hotel chains, restaurants, resorts, jewelry stores and other retail outlets have filed for requests to immediately convert their GEMs into cash.
The requests range from as low as a few thousand pesos to several millions.
Lyka’s partner merchants also temporarily suspended the acceptance of Lyka GEMs from customers until the issue with monetary authorities is resolved.
Users collect the GEMs and use them in hotels, restaurants and other retail stores, successfully creating a digital retail ecosystem.
The merchants, in turn, encash these GEMs with Lyka which gets a five percent share from the transactions.
The platform’s popularity boomed in the past two years because of the endorsement of Filipino celebrities who heavily publicized their Lyka patronage. As of this writing, some Filipino celebrities continue to endorse Lyka.
Merchants partnered with Lyka because of its aggressive and innovative marketing ideas which translated to enhanced brand awareness for their companies, sources said.
One hotel chain said income generated from Lyka comprised less than 10 percent of the hotel group’s total net income but the partnership was nonetheless useful in promoting its brand and attracting customers.