Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has proposed a one-year suspension on the registration of new payment system operators in the country through a draft circular.

 

The draft, titled “Regulations to Strengthen Integrity Controls in Payment Transactions,” circulated this Monday, is part of the bank’s efforts to make merchant payments, including those involving virtual asset service providers, traceable and to curb fraud and illicit transactions.

 

 

According to the BSP, the move is aimed at ensuring a holistic review of the taxonomy and licensing framework for payment system operators, including the associated risk management and regulatory considerations.

 

The bank also proposed a centralized database for merchants accepting quick response (QR) code payments and stricter controls over payment arrangements involving intermediaries between financial institutions and sellers.

 

A key requirement proposed by the BSP is for institutions under its supervision to constantly identify the actual merchants behind a payment and the entity to which the payment is made.

 

If certain information about the payer and payee is missing, inaccurate, or inaccessible, the institution facilitating the payment is expected to reject or suspend the transaction, except in cases involving temporary technical problems covered by documented safeguards approved under its incident management framework.

 

“A BSP authorized to engage in merchant acquisition shall not process or continue to process a transaction where the merchant cannot be identified or where the transaction cannot be attributed and reconciled to the same merchant,” the BSP said.

 

Under the proposed rules, the central bank would also bar intermediaries responsible for facilitating transactions from delegating or subcontracting merchant acquisition to another entity, including the addition of another intermediary tier. However, ancillary support services could still be outsourced in accordance with applicable BSP rules.