BSP orders Lyka to suspend payment system operations

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Metro Manila (CNN Philippines, July 23) — The Bangko Sentral ng Pilipinas (BSP) on Friday ordered social media app Lyka to suspend its activities as an operator of payment system (OPS) pending its registration.

Lyka, which was launched in the Philippines by a Hong Kong-based firm, allows users to buy, exchange, and use Gift cards in Electronic Mode (GEMs) to pay for goods and services.

"The Monetary Board has ascertained that these activities make Lyka an OPS and is thus required to register with the BSP, which is needed before it is allowed to continue with its OPS activities," the central bank said.

The BSP said Lyka's operators "have already expressed willingness" to register with them as an OPS.

Entities running payment systems are required to register with the BSP in compliance with Republic Act No. 11127, or the National Payment Systems Act, and BSP Circular No. 1049.

This would allow monetary authorities to ensure they function "safely, efficiently and reliably," the BSP said.

"Those that fail to comply may be ordered to stop operations until immediate action is taken to register with the BSP," it added.

"This is without prejudice to other enforcement actions that may be taken against the OPS and its directors/officer and/or employees in accordance with the BSP's authority over payment systems," the central bank said.