Financial institutions wanting to launch electronic payment services will no longer have to jump through hoops to obtain regulatory approval but will, instead, be able to offer these features to clients after complying only with basic central bank requirements.
The streamlined process —which eliminates previously required tedious regulatory approvals—is meant to help the local economy grow faster by facilitating faster and higher volume of transactions, the Bangko Sentral ng Pilipinas said on Friday.
In a statement, the BSP said the move was in line with its reform agenda of promoting digital innovations and increasing the availability of safer and more efficient channels for delivering banking, payment, remittance, investment and other financial services.
As such, “the Monetary Board has approved the streamlined licensing requirements for BSP-supervised financial institutions that intend to offer electronic payment and financial services,” the central bank said.
Under the enhanced electronic payment licensing policy, the financial institutions that provide basic services or those that enable clients to access information on their deposit, loan and other balances, or receive funds through electronic means will be required only to notify the BSP within 30 days prior to the launch of those services.
Henceforth, the only electronic payment schemes that will require prior central bank approval are advanced services that allow clients to transfer funds from one account to another and initiate other financial transactions.
But even for these, the prescribed approval process will require only three steps. The first is for an applying financial institutions to “self-assess” their compliance with the prudential criteria set out in the BSP licensing framework of the Bangko Sentral. If they deem themselves to be compliant, the financial institutions will submit a certification of compliance and request a confirmation of eligibility to offer electronic payment services form the regulator. Finally, they will submit certain documentary requirements to eventually obtain a license.
The newly approved policy also requires financial institutions to make their electronic payment systems interoperable by participating in automated clearing houses such as InstaPay and PESONet.
“With its streamlined licensing policy on electronic payments, coupled with more vigorous drive for interoperability among financial institutions, the BSP looks forward to a highly efficient funds flow in the economy, supporting productive activities that fuel economic growth,” it said.