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BSP orders Lyka to stop payment system operations

July 23, 2021 - Friday 4:07 PM by MDM

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The Bangko Sentral ng Pilipinas on Friday said it ordered social media platform Lyka to stop its payment system operations because the company is not registered to do such activities.

In a statement on Friday, the BSP said it met with officials of Lyka and they “already expressed their willingness” to register the app as an operator of payment system (OPS).

Lyka is launched in the Philippines by a Hong Kong-based company. The platform allows content creators to earn Gift cards in Electronic Mode, or GEMs, from their followers. 

In turn, content creators can use the GEMs they earned to purchase items in Lyka’s partner stores.

“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.

Registration of an OPS allows the BSP to have oversight of the payment system it operates to ensure that it functions safely, efficiently, and reliably by itself, consistent with the central bank’s objectives of consumer protection and financial stability.

Under Circular No. 1049, OPS that are required to register, but are found to be operating without registration, shall be directed to comply with the Circular’s registration requirements. 

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