BSP onboards first non-bank e-money issuer

By: ManilaBulletin
Source: manilabulletin

The Bangko Sentral ng Pilipinas (BSP) has included OmniPay, Inc. in the roster of financial institutions that settle high value transactions safely and instantly through the BSP-owned and operated PhilPaSSplus.

In a statement, the BSP said OmniPay, Inc. became the first non-bank electronic money issuer (EMI) participant in the BSP’s Real Time Gross Settlement (RTGS) payment system. OmniPay is the first non-bank EMI licensed and supervised by the BSP.


“Giving non-bank electronic money issuers access to the RTGS system is in accordance with the National Payment Systems Act, authorizing the BSP to determine the institutions that are allowed to participate in payment systems owned and operated by it, and those that can open an account with the BSP for settlement purposes,” said BSP Assistant Governor Mary Anne P. Lim.

The extension of PhilPaSSplus access signals an era of a more inclusive national payment system, where nonbank financial institutions can make efficient and low-risk funds transfers without an existing RTGS participant sponsoring them into settlement.


BSP Assistant Governor Mary Anne P. Lim

Direct access to the PhilPaSSplus allows nonbanks to benefit from the efficiency and safety of sending, receiving, and maintaining funds with no less than the central bank.

Lim, who heads the BSP’s Peso RTGS Management Committee, noted that “As direct participation in the Peso RTGS payment system is expected to become more diverse based on global trends, the BSP has rules in place to safeguard the entire Peso RTGS payment system.”

There are now 236 institutions using the PhilPaSSplus to settle large value transactions and retail payment clearing results arising from ATM, InstaPay, PESONet, and check transactions.

These institutions include universal and commercial banks, thrift banks, rural banks, digital banks, Nonbank Quasi-Banks (NBQBs), Clearing Switch Operators (CSOs), Financial Market Infrastructures (FMIs), and non-bank EMI participants.

The BSP is among the first central banks that have initiated broader direct access of nonbank entities to central bank settlement services.

International standard-setting bodies have started developing access guidelines to ensure that the attendant risks remain manageable while payment systems continuously evolve amidst the emergence of new players and breakthrough financial technologies.

Last year, the BSP approved a round of rules for PhilPaSSplus after it was designated as a systemically important payment system (SIPS). The BSP updated and amended the RTGS PS rules since as SIPS, it could pose systemic risks and threaten the stability of the National Payment System (NPS), which ensures the circulation of money or movement of funds in the country.

In a circular memo (Memorandum No. M-2022-049) which was approved las Nov. 22, 2022, the BSP said the RTGS PS is “critical for maintaining price and financial stability, as well as preserving public interest.”

It added that, “this payment system ensures the smooth flow of funds between financial institutions that maintain settlement accounts with the Bangko Sentral (and) also facilitates funds transfers in financial markets where these institutions trade securities and foreign currencies for business and risk management purposes.”

The new rules clarified the participants to the RTGS PS. As defined by the BSP, the FMIs are infrastructures interlinked with the RTGS for the settlement of security, foreign exchange, and other financial market transactions.