Firms seek exemption from license ban on non-bank e-money issuers

MANILA, Philippines — Four entities are seeking exception from the moratorium imposed by the Bangko Sentral ng Pilipinas on the issuance of licenses to non-bank electronic money issuers (EMIs).

The EMI-non-bank financial institutions (EMI-NBFIs) submitted their applications under the sandbox framework after the central bank extended the ban on the grant of new licenses by another year.

BSP Deputy Governor Mamerto Tangonan earlier announced that the moratorium on the entry of new players had been extended by one year to Dec. 15, 2024.

The central bank’s Monetary Board issued Resolution 1598 last Dec. 7 approving the one-year extension of the moratorium on regular application for new EMI-NBFIs.

However, applications for exemption from the moratorium may be granted under the conditions set out in BSP Memorandum 2021-064 issued in November 2021.

“These exceptions are intended to modify the current landscape in the e-money industry with the entry of new players that have new business models and new technologies and shift in focus to unserved and underserved markets,” the BSP said.

According to the regulator, interested applicants that meet the abovementioned exceptions and offer strong value propositions for e-money services may apply through the regulatory sandbox framework under BSP Circular 1153 issued in September 2022.

Popular EMI-NBFI players include GCash operator G-Xchange Inc., Maya Philippines Inc., Alipay Philippines, CIS Bayad Center, among others.

In November 2021, the BSP imposed a two-year moratorium on the issuance of EMI licenses to NBFIs to ensure that its resources are managed and mobilized judiciously in a manner that promotes financial stability and inclusive growth as well as advances the development of innovative electronic money solutions that offer strong value propositions.

As of Dec. 15, there are 44 BSP-licensed EMI-NBFIs and 28 EMI-banks operating in the country.

Licensed EMIs provide money transfer or remittance services using electronically stored money value system and similar digital financial services.

The central bank also earlier imposed a three-year moratorium on the grant of licenses to digital banks as it limited the number of players in the new banking classifications.

The BSP Monetary Board has granted digital banking licenses to Overseas Filipino (OF) Bank of state-run Land Bank of the Philippines, Tonik Digital Bank, UNObank, UnionDigital Bank of Aboitiz-led Union Bank of the Philippines, GOtyme – a joint venture between the Gokongwei Group and Singapore-based digital bank Tyme, and Maya Bank of PLDT’s Voyager Innovations and PayMaya Philippines.

The moratorium allows the BSP to monitor the performance and impact of digital banks on the banking system and their contribution to the financial inclusion agenda.