BSP onboards OmniPay as 1st non-bank in settlement platform

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has onboarded OmniPay Inc. in the roster of financial institutions that settle high value transactions safely and instantly through the central bank-owned and operated national payment system.

BSP assistant governor Mary Anne Lim said OmniPay became the first non-bank electronic money issuer (EMI) participant in the BSP’s Real Time Gross Settlement (RTGS) payment system.

“Giving non-bank electronic money issuers access to the RTGS system is in accordance with the National Payment Systems Act, authorizing the BSP to determine the institutions that are allowed to participate in payment systems owned and operated by it, and those that can open an account with the BSP for settlement purposes,” Lim said.

OmniPay’s onboarding in the Philippine Payment and Settlement System (PhilPaSS) Plus is another milestone for the BSP.

PhilPaSS Plus is a real-time gross settlement system that processes and settles high-value transactions between banks through the demand deposit accounts of the lenders maintained with the BSP.

Lim, who heads the BSP’s Peso RTGS Management Committee, explained the extension of PhilPaSS Plus access signals an era of a more inclusive national payment system, where nonbank financial institutions can make efficient and low-risk funds transfers without an existing RTGS participant sponsoring them into settlement.

Direct access to the PhilPaSS Plus allows non-banks to benefit from the efficiency and safety of sending, receiving, and maintaining funds with no less than the central bank.

“As direct participation in the Peso RTGS payment system is expected to become more diverse based on global trends, the BSP has rules in place to safeguard the entire Peso RTGS payment system,” Lim said.

There are now 236 institutions using the PhilPaSS Plus to settle large value transactions and retail payment clearing results arising from ATM, InstaPay, PESONet and check transactions.

These institutions include universal and commercial banks, thrift banks, rural banks, digital banks, nonbank quasi-banks, clearing switch operators, financial market infrastructures and non-bank EMI participants.

The BSP is among the first central banks that have initiated broader direct access of non-bank entities to central bank settlement services. International standard-setting bodies have started developing access guidelines to ensure that the attendant risks remain manageable while payment systems continuously evolve amidst the emergence of new players and breakthrough financial technologies.

Latest data from the central bank showed that transactions done through PhilPaSS Plus reached P129 trillion as of the end of the third quarter of 2023 as volume increased by 3.2 percent to 374,986.