Fintechs, e-wallets gear up vs digital vote-buying, selling

MANILA, Philippines — With the May elections just around the corner, FinTech Alliance.PH and the eMoney Association of the Philippines are gearing up against the possible proliferation of digital vote-buying and vote-selling schemes, as well as unlawful activities, during the campaign period.

Both organizations launched an advocacy campaign on the responsible use of digital payment platforms in view of the general elections on May 9.

FinTech Alliance.PH and eMoney Association assured the Bangko Sentral ng Pilipinas (BSP) and the Anti-Money Laundering Council (AMLC) that members have put in place robust control mechanisms to mitigate abuse of digital fund transfer services.

This includes stringent onboarding processes, such as one-is-to-one account registration and creation, robust electronic Know-Your-Customer, and account verification to track the identity and traceability of digital transactions.

Institutions have also established compliance measures and risk management systems, supported by advanced algorithms and security controls that can detect unusual or suspicious transactions.

“Congruent to these measures is our collective advocacy to further strengthen and promote financial education and consumer protection programs, especially during this election season. We remain steadfast, as industry leaders, in our commitment to promote the responsible use of digital payment platforms, especially in the days leading up to the May elections,” the groups said in a joint statement.

Both groups vowed to uphold clean, honest and credible elections by ensuring that the digital products, platforms and services offered are not misused for vote buying, vote selling and other illegal political partisan activities.

“We call on all digital wallet and account owners to use these digital finance channels responsibly and to be vigilant by proactively reporting unfair practices that could compromise our bid for fair and free elections,” they added.

The industries want to safeguard the credibility and integrity of digital services and channels, primarily created to better the lives of all Filipinos, through a massive public information campaign.

At the start of the year, BSP Deputy Governor Chuchi Fonacier issued Memorandum No. 2021-074 instructing banks to re-assess their existing controls in detecting or preventing the possible massive influx of fraudulent accounts and transactions in view of the recent warnings from the Commission on Elections and the Philippine National Police regarding the possibility of vote buying or selling through digital means.

To mitigate the heightened risk of the possible use or misuse of digital channels in vote buying or selling activities, the regulator directed BSP supervised financial institutions (BSFIs) to institute necessary enhancements and remedial measures to ensure that appropriate customer onboarding processes and effective fraud management systems are in place.

Likewise, BSFIs were told to make sure that their current account and transaction monitoring capabilities are commensurate to respond against the fraudulent activities.

The BSP said BSFIs should concentrate a significant number of account registrations in the area or locality where there is rampant vote buying or selling and should be on the look out for large cash transactions during election period.

The AMLC also issued an advisory last Feb. 14 reminding all covered persons under Republic Act 9160 or the Anti-Money Laundering Act of 2001 (AMLA) to conduct appropriate customer due diligence measures to closely monitor unlawful activities during the upcoming elections.

“In anticipation of the influx of financial activities that usually occur during the election period, and to ensure that proceeds from unlawful activities are not laundered during the campaign period, all covered persons are reminded of their obligations under the AMLA, as amended, and its implementing rules and regulations,” the AMLC said.

Fintech Alliance.PH is composed of Rizal Commercial Banking Corp., CIMB Bank, Smart Communications, PayMaya, Overseas Filipino Bank, Xendit, 7-Eleven, Mynt, Grab, Xendit, among others. Members of the eMoney Association include PayMaya, GCash, GrabPay and OmniPay.