BSP reiterates parent must apply for LYKA payments license
The Bangko Sentral ng Pilipinas (BSP) confirmed its decision to deny an operator of payments (OPS) license to the marketing arm of social media platform LYKA, saying the parent organization must be the one to register with the BSP.
The central bank said in a statement Friday that it upheld the cease-and-desist order (CDO) issued against Digital Spring on July 23. It said a letter has been sent confirming the denial of the Digital Spring application.
“The CDOs against LYKA/Things I Like Co. Ltd. and Digital Spring are affirmed and shall remain effective until Lyka properly registers as an OPS in accordance with law and regulations,” the BSP sai.
Through the Gift cards in Electronic Mode or GEMS on its platform, LYKA allows users to purchase, exchange, and pay for goods and services with selected merchants.
“These activities make LYKA an OPS and, therefore, its registration is required before it can continue with these activities,” the central bank said.
BSP Deputy Governor Mamerto E. Tangonan said the situation is akin to a pilot who must personally obtain a flying license.
“Digital Spring applying for registration, instead of LYKA/TIL itself, is like saying the airline ticketing office can apply for a flying license on behalf of the pilot. It is the pilot who must apply for the license,” Mr. Tangonan said.
The central bank urged the public to only patronize registered OPS. LYKA has yet to register as an OPS to date, the BSP said.
According to its database, the BSP has granted OPS licenses to 164 entities as of Oct. 1. Meanwhile, nine companies have secured provisional certificates of registration from the BSP.
“For its continuous protection, the public is reminded to only use the payment services of a registered OPS,” the BSP said.
Cash-in service providers, bills payment service providers, and entities such as payment gateways and merchant acquirers fall under the OPS classification if they enable sellers of goods and services to accept payment in cash or digital form.
In July, the BSP told financial institutions to stop engaging in transactions with LYKA as it remained unregistered with the BSP.
LYKA is a social media platform run by a Hong Kong which was heavily promoted by various celebrities. – Luz Wendy T. Noble
