The Philippine Central Bank, officially known as Bangko Sentral ng Pilipinas (BSP), is cracking down on payment service providers by making it harder to hide who is actually receiving money.
International business media outlet Bloomberg is reporting that BSP has issued a draft memo proposing amendments to the Manual of Regulations of Payment Systems that would require greater visibility over merchants, beneficiaries and their underlying owners, as well as payments channels, transactions and settlement accounts. Any payment arrangements that obscure those relationships or make them difficult to reconstruct would be prohibited.
The memo specifically identifies casino and wagering operators – both land-based and online – as companies that should in future only be accepted under a direct merchant arrangement, as opposed to layered merchant agreements where there is an intermediary between the payment acquirer and the actual merchant. Casinos would also be subject to enhanced due diligence and enhanced monitoring.
The Bloomberg report says release of the proposed amendments comes after the BSP detected merchants accepting thousands of tiny payments late into the night, which were found to be bets on online casinos. It also found that more than 8,000 merchants were using what appeared to be small, legitimate retailers to receive these payments. Those merchant accounts have since been closed.
BSP Deputy Governor BSP said payment providers must ensure greater due diligence of companies utilizing their platforms in order to protect people from fraud.
“We want to protect consumers from online fraud, illegal activities and also from money launderers,” stated Deputy Governor Mamerto Tangonan, according to Bloomberg. “You cannot expand digitalization if people’s money is being stolen.”
The report also quoted PAGCOR Chairman and CEO Alejandro Tengco as confirming the regulator is working with the BSP on the issue, although he added, “Unfortunately, we don’t have control over that.”
Bloomberg said it had contacted a number of payment providers, with leading provider Maya expressing its support for any measures that “strengthen the integrity, safety and trustworthiness of the digital payments ecosystem.”
The BSP last year famously ordered the removal of direct links to licensed online gaming operators by e-wallet providers, however PAGCOR noted at this week’s IAG EXPO in Manila that channelization – the percentage of online play on licensed sites in the Philippines versus black market sites – was currently around 50%. It has been reported that as much as 75% of play had been directed to regulated sites prior to the de-linking, suggesting that de-linking may have created a larger problem than it was intended to solve in the first place.
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