BSP extends ban on e-money licenses

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is extending the moratorium imposed on the issuance of licenses to new non-bank electronic money issuers (EMIs) by another year.

BSP Deputy Governor Mamerto Tangonan said the moratorium on the entry of new EMI-non-bank financial institutions (EMI-NBFI) has been extended to Dec. 15, 2024 from Dec. 15, 2023.

Tangonan said the Monetary Board issued Resolution 1598 on Dec. 7 approving the one-year extension of the moratorium on regular application for new EMI-NBFI for another year.

Popular EMI-NBFI players include GCash operator G-Xchange Inc., Maya Philippines Inc., Alipay Philippines, CIS Bayad Center, among others.

In November 2021, the BSP announced a two-year moratorium on the issuance of EMI licenses to NBFIs to ensure that its resources are managed and mobilized judiciously in a manner that promotes financial stability and inclusive growth, as well as advances the development of innovative electronic money solutions that offer strong value propositions.

However, Tangonan said an exception may be granted for application with proposals involving new business models and unserved, targeted niches. New technologies can also request for exception under the test-and-learn or Regulatory Sandbox framework.

“These exceptions are intended to modify the current landscape in the e-money industry with new business models and new technologies shifting the focus to unserved and underserved markets,” he said.

According to Tangonan, interested new EMI-NBFI applicants, which offer strong value propositions to provide e-money services may apply through the regulatory sandbox framework under BSP Circular 1153 issued in September 2022.

As of July 25 this year, the BSP has issued licenses to 42 EMI-NBFIs and 28 EMI-banks. Licensed EMIs provide money transfer or remittance services using electronically stored money value system and similar digital financial services.

The central bank has also imposed a three-year moratorium on the grant of licenses to digital banks as it limited the number of players in the new banking classifications.

The BSP Monetary Board has granted digital banking licenses to Overseas Filipino (OF) Bank, Tonik Digital Bank, UNObank, UnionDigital Bank, GOtyme and Maya Bank.

The moratorium allows the BSP to monitor the performance and impact of digital banks on the banking system and their contribution to the financial inclusion agenda.

Under its Digital Payments Transformation Roadmap, the central bank aims to convert 50 percent of total retail transactions to electronic channels and raise the number of Filipino adults with bank accounts to 70 percent by 2023.