BSP closing applications for non-bank e-money issuers for 2 years starting Dec. 16, 2021

The Bangko Sentral ng Pilipinas (BSP) is imposing a two-year moratorium on the licensing of non-bank electronic money issuers (EMIs) as the central bank recalibrates its approach to the e-money landscape in the country.

At his weekly virtual press chat on Thursday, BSP Governor Benjamin Diokno said the approach involves the closure of the regular application window for new “EMI-Others” license or non-bank institutions registered with the central bank as money transfer agents and the introduction of the test-and-learn pathway for innovative e-money solutions that offer strong value propositions.

“This strategic change will enable the Bangko Sentral to monitor the performance of current market players and the risks they pose to the financial industry. This will also allow us to assess their impact in relation to our financial inclusion and digital payments transformation objectives," Diokno said.

The BSP chief said all applications received by the Bangko Sentral until December 15, 2021 will be processed on a first-come, first-served basis.

These will be assessed for completeness and sufficiency of documentation and information submitted as well as compliance with other applicable requirements, he said.

“Applications received until December 15, 2021 with noted deficiencies will be returned and considered closed.  The Bangko Sentral will no longer entertain nor accept new applications beginning December 16, 2021,” he added.

Diokno said there are 25 pending applications with the BSP for non-bank EMI license.

Meanwhile, the “test-and-learn” pathway for new non­-bank EMI applicants allows them to still participate in the digital payments and financial ecosystem by requesting for exception under the BSP’s Test-and-Learn / Regulatory Sandbox Framework.

“The specific guidelines governing new non-bank EMI applications under the Regulatory Sandbox Framework shall be covered by a separate issuance,” Diokno said.

A regulatory sandbox refers to a framework set up by a regulator to allow financial technology startups to test their innovation in a controlled environment.

The BSP chief chief said that the policy decision “reflects our commitment to espouse an enabling environment for responsible and responsive innovation in the financial industry.”

“At the same time, we will be able to ensure that the business environment continues to serve the public interest, allow healthy competition among market players, and foster safe and interoperable payments for the digital economy,” Diokno said.

As of end-October 2021, there are already 35 licensed non-bank EMls, which is more than three times the number of players in 2019. — BM, GMA News